Wipro outlook cautious on flat growth

Bangalore, April 25 (IANS) India's third largest IT bellwether Wipro Ltd Wednesday hoped revenue from its flagship services business would improve in ensuing quarters despite uncertainty in the macro-environment that kept sequential growth flat in fiscal 2012.

Surviving a tough fiscal (2011-12) with a modest 9.7 percent IT revenue growth year-on-year (YoY) and two percent sequentially in the fourth quarter (January-March), the company projected a flat growth for the first quarter (April-June) of new fiscal (2012-13).

"We expect revenue from our IT services business to be in the range of $1520-1550 million for first quarter (Q1) ending June 30, compared to $1536 million ($1.54 billion) posted in fourth quarter (January-March) of last fiscal (2011-12)," Wipro's chief financial officer Suresh Senapaty told IANS here.

Unlike rival Infosys, though Wipro does not give revenue guidance for entire fiscal (FY 2013), it is upbeat on more deals getting closed in this quarter (Q1) and improving in subsequent quarters despite flattish IT budgets of their global IT clients.

"Decision-making is coming back. As we are getting into Q1, we should see some deals closing and expect good growth in subsequent quarters," Senapaty asserted.

Earlier, the global software major reported net profit of Rs.14.81 billion (Rs.1,481 crore) for fourth quarter, registering eight percent increase YoY in rupee terms on total revenue of Rs.98.69 billion (Rs.9,869 crore), which is 19 percent up YoY.

Under the International Financial Reporting Standards (IFRS), net income for the quarter is up eight percent YoY to $291 million and total income to $1.94 billion, an increase of 19 percent YoY.

"Our focus on operations helped improve revenue productivity and deliver strong cash flows in a volatile environment," Senapaty observed.

On annualised basis, net profit for entire fiscal (FY 2012) increased five percent YoY to Rs.55.73 billion (Rs.5,573 crore) and total revenue to Rs.375 billion (Rs.37,525 crore), up 21 percent YoY in rupee terms.

Under IFRS, net income is up $1.1 billion and total revenue to $7.36 billion.

"IT services revenue for FY 2012 also increased 21 percent YoY to Rs.284 billion (Rs.28,431 crore) in rupee terms and to $5.6 billion in dollar terms," Senapaty noted.

Operating margin, however, declined marginally to 20.7 percent in Q4 from 20.8 percent in Q3 and to 20.8 percent YoY in FY 2012 from 22.7 percent YoY in FY 2011.

IT services account for 76 percent of the company's revenues and 93 percent of its operating income.

"Corporations globally are focused on leveraging technology to drive revenues and productivity. Our strategy is aligned to deliver value to our customers by partnering with them in this journey," Wipro chairman Azim Premji said in a statement on the occasion.

IT services business added 41 clients during quarter under review (Q4) and 173 in entire fiscal, taking the total number to 943 for FY 2012 from 904 in FY 2011.

The company, in which Premji holds around 78 percent of the equity stake, declared a final dividend of Rs.4 per share of Rs.2 par value and a total dividend of Rs.6 per share, including Rs.2 as interim dividend in October 2011.