Wipro second quarter revenues up 19 percent to $1.76 billion

Wipro second quarter revenues rose 19 percent to $1.76 billion. Net income increased 28 percent to $309 million.

IT Services Revenue grew at 2.7 percent q-o-q and 5.9 percent y-o-y to $1,631.1 million.

Wipro said IT Services Earnings Before Interest and Tax (EBIT) increased 31 percent to $362 million.

Azim Premji, chairman of Wipro, said there are positive indicators on the global economy.

The contribution of media and telecom business to Wipro revenue was 13.9 percent in Q2 against 13.6 percent in Q1.

Finance solutions segment contributed 26.4 percent (26.5 percent).

The revenue contribution of manufacturing business was 19 percent (19.1 percent).

Healthcare contributed 10.1 percent (9.8 percent) revenue to Wipro.

Retail and consumer segment chipped in 14.8 percent (15.1 percent) revenue to the IT outsourcing major.

Contribution of energy sector was 15.8 percent (15.9 percent).

America region brought in 49.8 percent (49.7 percent) revenue to Wipro against Europe’s 28.9 percent (29 percent).

India and Middle East contributed 8.3 percent (8.8 percent) revenue to Wipro against Asia Pacific 13 percent (12.5 percent).

Wipro expects revenues from its IT Services business to be in the range of $1,660 million to $1,690 million in the third quarter ending December 30 2013.

Wipro’s manpower came down to 147,216 employees as of September 30, 2013 from 147,281 in the first quarter.

Wipro added 45 new customers for the quarter.

Dipen Shah, head of Private Client Group Research, Kotak Securities, said Wipro’s revenues were broadly in line with expectations. The growth was lower than that reported by peers, though. However, margins were higher than expectations, partly due to a marginal reduction in employee strength. Margins improved despite higher impact of salary increments, as the company improved the utilization levels during the quarter.

IT industry analysts say 3Q guidance is marginally better than expectations. The company’s focus on mining existing clients and winning large deals seems to be yielding results. Consistent growth in line with industry peers, in the future, can lead to better valuations for the company.

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