Wipro net rises 46% to Rs 700 cr

An impressive turnaround in its business process outsourcing operations, strong volume growth in infotech services and consistent growth in its consumer products business have helped Wipro Ltd post a 46 per cent higher net profits for the second quarter ended September 30, 2006, than the corresponding quarter last year.

The country's third-largest software exporter, which is also expanding its hydraulic engineering and furniture businesses, earned a net profit of Rs 700 crore in the second quarter on a topline of Rs 3,546 crore, up 41 per cent year on year.

An upbeat Wipro Chairman Azim Premji attributed the overall growth to the focus on execution and operational improvements.

The global infotech services business has come in with figures matching the industry, showing a strong topline growth of 44 per cent totalling Rs 2,720 crore, ahead of its guidance by around Rs 60 crore.

On a sequential quarter basis, the company's business has grown by close to 11 per cent. The profit before tax has grown by 44 per cent to Rs 663 crore.

However, the operating margins for this business have been stagnant at 24 per cent due to a wage hike and stock options that kicked in during the second quarter.

Wipro BPO's turnaround strategy showed results, buffering these two factors with its operating margins improving to 23 per cent from 13 per cent year on year.

"Our global infotech services and products business added 54 clients during the quarter, 11 of which were Global 500 or Fortune 1,000 companies," Premji said.

"The BPO services business posted strong revenue growth and operating margin improvement, reinforcing our confidence that it is moving in the right direction of delivering industry-leading growth rates," he added.

Wipro signalled that its global infotech services business would reach a topline of $633 million (little over Rs 2,900 crore) in the third quarter ending December 31, 2006, indicating 7.5 per cent sequential growth.

At the end of the halfyear, Wipro employed close to 62,000 people, including around 46,000 in the global infotech services business and around 15,500 in its BPO operations.

During the quarter, the company added a net of 5,328 employees in its infotech services business, including 600 from its recent acquisitions.

Meanwhile, Wipro Infotech, the India, West Asia and Asia-Pacific infotech business arm, has turned in a 36 per cent topline growth to reach Rs 542 crore, while its profit before tax (PBT) shot up by 57 per cent to Rs 46.8 crore.

Premji said the company's services business contributed 38 per cent to the total revenue during the quarter and was growing 46 per cent year on year.

Another star performer has been consumer care and lighting, which is involved in soaps, lighting, office furniture and vanaspati. It posted 41 per cent growth to cross the Rs 200 crore topline mark during the quarter, with operating margins at 12 per cent.