Wipro Posts Revenue Growth, but Profits Stagnant

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Wipro, India's third largest outsourcer, reported Wednesday growth in revenue for the quarter ended September 30, but its profits stagnated.

The company reported revenue of 64.10 billion Indian rupees (US$1.36 billion at the exchange rate at the end of the quarter) for the quarter ended September 30, up by 36 percent over the same period last year. But profits grew marginally by 1.3 percent to 8.22 billion Indian rupees in the quarter.

The results are based on U.S. generally accepted accounting principles (GAAP).

Indian outsourcing companies have been hit by the economic downturn in the U.S., which is their main market. Their revenue is however getting boosted to an extent by the appreciation of the U.S. dollar against the Indian rupee.

Wipro operates in a range of sectors and even has a soaps and detergents business but its IT services and business process outsourcing (BPO) units accounted for 74 percent of total revenue in the quarter.

Revenue from its IT and BPO business for the quarter was 47.34 billion rupees up by 36 percent over the same quarter last year. Wipro's IT products business recorded a 44 percent growth in revenues to 9.14 billion rupees in the quarter.

The uncertainty in India's outsourcing industry is also beginning to get reflected in fewer hires.

Wipro for example added 1,877 new staff in the quarter ended September 30. The company had 97,552 employees at the end of the quarter in its IT services and BPO business, which included 75,748 employees in the IT business unit and 21,804 employees in the BPO business unit. It added 28 new clients during the quarter.

Wipro said its outlook is cautious in the near term given the extent of strain on the global economy.

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