Wipro revenues up 5 percent to $1.64 billion in first quarter FY 2014

Wipro revenues rose 5 percent to $1.64 billion in the first quarter of FY 2014. In the first quarter ended June 30, 2013, Wipro net income increased 11 percent to $273 million.

Wage hikes for both onsite and offshore employees effective June 2013 have impacted its operating margins in the quarter.

Wipro’s IT services revenue rose 4.9 percent y-0-y to $1,588.3 million.

IT services EBIT increased 2 percent to $300 million. Operating income from IT services was 20 percent for the quarter.

“We are seeing higher confidence among our clients on the backdrop of positive macroeconomic developments, particularly in the US,” said Azim Premji, chairman of Wipro.

“We are seeing a pickup in large deal closures which has reflected in strong order book in the current quarter. Our clients look to technology to pursue growth and profitability and increase organizational agility,” said T K Kurien, executive director & chief executive officer of Wipro.

Wipro expects revenues from IT services to be in the range of $1,620 million to $1,650 million.

IT Services segment added 1,469 people in the quarter to 147,281 employees as of June 30, 2013.

Wipro added 28 new customers for the quarter.

“Wipro’s results were marginally lower than estimates. However, the 2-3 percent q-o-q growth guidance in Q2 FY14 revenues is stronger than expected. The company is more positive about the deal closure rate as well as the pipeline. This, along with the stable economic scenario in major developed economies, bodes well for the future growth of Wipro,” said Dipen Shah, head of Private Client Group Research, Kotak Securities.

Performance of Wipro divisions

Global Media & Telecom business revenue contribution decreased to 13.6 percent to 14.9 percent.

Wipro’s Finance Solutions business revenue contribution increased to 26.5 percent from 26.4 percent.

Revenue contribution of Manufacturing & Hitech business decreased to 19.1 percent from 19.4 percent.

Wipro’s Manufacturing & Hitech segment contribution to revenue dipped 9.8 percent from 10.1 percent.

Retail, Consumer Goods & Transportation revenue contribution enhanced to 15.1 percent from 15 percent.

Wipro on Friday said Energy, Natural Resources & Utilities contributed 15.9 percent revenue against 14.2 percent.

Performance of regions

49.7 percent income came from Americas in Q1 FY 2014 against 51.6 percent in Q1 FY 2013.

Europe contributed 29 percent revenue against 28.1 percent.

Wipro’s revenue contribution from India & Middle East business was flat at 8 percent.

APAC and Other Emerging Markets contributed 12.5 percent revenue against 11.5 percent in the year-ago quarter.

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