Wipro's IT services business posts slow growth in difficult market
Indian outsourcer Wipro reported slow revenue growth in its IT services business, reflecting a continued volatility in the outsourcing market.
The company said Friday that revenue for its IT services in the first quarter was $1.6 billion, up by 3.2 percent from the same quarter last year. For its fiscal year ended March 31, revenue was $6.2 billion, a 5 percent increase from the previous fiscal year.
Wipro and other Indian outsourcing companies are contending with an uncertain market for outsourcing, with wild swings in customer demand from quarter to quarter, analysts said.
Cross-currency volatility also affected Wipro's financial performance, the company said.
Wipro's IT services revenue grew higher in rupees at 13 percent in the quarter and 19 percent for the year . The company does not break out profit figures for its IT business.
To focus more on its IT services business, Wipro announced last year a demerger of its non-IT businesses in consumer care and lighting, which came into effect on March 31.
The company added 2,907 staff in the quarter, taking the total to 145,812 employees, and added 52 new customers.
It has forecast IT services revenue of up to $1.6 billion in the current quarter.
India's largest outsourcer, Tata Consultancy Services, reported earlier this week that its revenue in the first quarter increased by 14.8 percent year-on-year to $3 billion, while net profit in the quarter grew 13 percent to $663 million. India's second largest outsourcer, however, reported profit fell by about 4 percent year-on-year to $444 million, even as revenue grew 9.4 percent to $1.9 billion, citing volatility in the outsourcing market, and delays in customer purchase decisions.
While growth is returning to the market, in the short-term outsourcers are seeing big market shifts from one quarter to another, said Siddharth Pai, president for Asia-Pacific for Information Services Group.
Wipro's earnings numbers are based on international financial reporting standards (IFRS).