Wipro Q2 net up 8%; Oct-Dec sales expected at $1.77-1.81 billion

IT services firm Wipro today reported a 7.9% growth in consolidated net profit at Rs 2,084.8 crore for the second quarter ended September 30, 2014, helped by infrastructure services.

The city-headquartered firm posted a net profit (after tax, minority interest and share of profit of associates) of Rs 1,932.1 crore in the year-ago period.

Net sales of the country's third largest software services exporter rose by 7.5% to Rs 11,816 crore in July-September quarter this fiscal from Rs 10,990.7 crore in the same quarter of 2013-14 fiscal.

However on quarter-on-quarter (q-o-q) bases, Wipro's net profit declined marginally by 0.9% from Rs 2,103.2 crore in April-June quarter. Revenue was up by 5% in July-September compared to Rs 11,245.5 crore in the first quarter.

Commenting on the performance, Wipro Chairman Azim Premji said: "Business leaders in the US continue to exhibit increased confidence on growth prospects. Clients are increasingly looking to drive business value from their technology investments."

But, analysts feel that the firm's performance has failed to meet market expectations.

Greyhoune Research CEO Snachit Vir Gogia said: "With a sequential growth of 1.8% q-o-q, we believe that this quarter has been poor and far from industry standards. Their business continues to be a well balanced portfolio between Infrastructure and application services, but BPO, product engineering and ADM continue to decline."

While, Wipro continues to have strong focus on cloud services, they need to increase their focus on Cloud-delivered managed services, he added.

Revenue from IT services stood at USD 1.77 billion, a quarter-on-quarter growth of 1.8% and year-on-year of 8.6%.

In July, the firm had said it expected IT services revenues in the July-September quarter to be in the range of USD 1.77-1.81 billion.

The company said in the October-December quarter it expects revenues from IT services business to be in the range of USD 1.808-1.842 billion.

Wipro CEO T K Kurien said: "While the industry landscape is still undergoing change, we see multiple opportunity spaces for growth and gaining market share."

"The firm continues to execute our stated strategy of leveraging platforms for non-linear growth and creating differentiated solutions around the new technology paradigms."

The IT Services segment had a headcount of 154,297 as of September 30, 2014. The firm added 50 new customers during the second quarter.