Wipro Earnings Review (WIT)

| About: Wipro Limited (WIT)

Perfect for weekends or slow news days, and consistent with our goal of familiarizing U.S. investors with Indian stocks, India-based investment professional and IndiaStockBlog contributor Radha Kota summarizes Wipro's earnings results as of the most recent quarter, in two paragraphs.

India's third-largest software exporter Wipro Ltd. said its net profit jumped 31 percent to US$98.1 million in the April-June quarter mainly because of outsourcing by Western corporations. Total Revenues for the quarter ended June 30, 2005 were Rs. 22.9 billion ($ 525.5 million), representing an increase of 29% over the corresponding period in the previous year. Net Income was Rs. 4.3 billion ($98.1million), representing an increase of 31% over the same period last year. Earnings per share was Rs. 6.10 ($0.14) for the quarter ended June 30, 2005, representing an increase of 30% over the earnings per share of Rs. 4.69 for the quarter ended June 30, 2004. Compared to the previous two quarters ($100 million profits on $378 million revenue for Mar-2005 quarter, and $98.7 million profits on $483 million revenue for Dec-2004 quarter) profits were down by more than 20 percent. This decrease was primarily due to appreciation of the Indian currency, and increased invesment in sales and restructuring of their Business Processing Operations (NYSE:BPO) unit.

Wipro hired 2,097 software professionals during the latest quarter, for a total staff of 41,911. It also received 29 new clients. Wipro's profit margin will come under further pressure in the next few months, with increasing pricing pressure and company’s announced salary increases in October. Recently, Indian companies such as Satyam, Wipro, Cognizant have been under increased pressure to hike employee compensation to compete with their foreign rivals such as EDS, Accenture, and KPMG, who have been outsourcing their US and UK projects to their Indian divisions.

[Radha Kota]

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Tagged: , Information Technology Services, India
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