100% Interest Income Rise Props Wipro Q1 Profit
Thanks to a whopping 100 times increase in interest income from Rs 20 lakh to Rs 20.7 crore, the software giant Wipro reported its highest-ever profit margins for the first quarter (Q1) ended June 2001.
The company's net profit margin (NPM) jumped to 26.5 per cent in first quarter from 17.4 per cent from same quarter previous year. Operating profit margin was up at 32.3 per cent from 22.4 per cent .
If one were to exclude the interest income of Rs 20.7 crore (Rs 20 lakhs) from Q1 performance , the company's net profit margin could had ended at 23.8 per cent and OPM to 29.7 per cent.
It was earlier in quarter ended December 2000 that the company had reported a highest-ever profit margins with NPM at 24.40 per cent and OPM at 31.43 per cent.
Interestingly, the net profit increase of 92.9 per cent to Rs 207.70 crore was after a more than 100 percent net profit growth in consecutive last four quarters. The 93 per cent increase was also inflated with higher interest income. If one could exclude interest income from the quarters, the net profit could had increased just 74 per cent in Q1.
While the company's sales revenue rose 26.95 per cent to Rs785.20 crore in Q1. It was in the quarter ended December 1998, that the company had reported its highest-ever sales income growth of 48.7 per cent.
The growth in net profit was also aided by lower than commensurate increase in expenses. Total expenses increased by 16.2 per cent to Rs 562 crore in Q1. Salary cost accounted for 23 per cent of the total expenses.