Wipro growing with strong tailwind of deals

Wipro Technologies, the flagship IT services arm of $1.2 billion Wipro Ltd, has posted a topline growth of 26 per cent for the second quarter ended September 2005 and is expected to continue to grow at an average of 30 per cent growth over the next few quarters.

"The second quarter has seen a robust growth with a good tailwind of deals. Our challenge is how to manage these and convert them into results. We are looking towards leading the industry growth over the next few quarters with good optimism," said Azim Premji, chairman, Wipro.

This business grew 8.1 per cent sequentially as against the projected 6 per cent. The PBIT was at Rs 462 crore, a growth of 11 per cent sequentially.

Operating margins, however, declined to 24 per cent from 28 per cent in Q2FY05, mainly owing to the ongoing BPO arm revamp. Operating margins for BPO dipped to 13 per cent from 22 per cent.

Wipro added 39 new to its clientele, including two new clients in the BPO services. Fuelling this business is also the research and development (R&D) services division that employs close to 12,000 people and accounts for 33 per cent of the business.

Speaking on the uptake in R&D services, A L Rao, head of the arm, said, "Though there is no big-time increase in R&D spend, there is a feeling R&D investment should be effective. This is driving the outsourcing of R&D to companies like us majorly in the wireless and multimedia services."

Added Premji: "During the second quarter, we continued to build our strengths in the US with 23 new clients, and further increased our presence in Europe. This quarter we added clients across business lines, testimony to our investment in a broad suite of services and an integrated approach to enhancing client performance."