Wipro, India's third-largest software maker, posted higher-than-expected second-quarter profit growth of 18 percent Friday on the back of overseas orders, new clients and a 600 million dollar US acquisition.
Profit rose to 8.237 billion rupees (208.4 million dollars) in the three months ended September 30, from 7.002 billion rupees a year earlier, the Bangalore-based company said. Revenue rose 35 percent to 47.84 billion rupees.
Wipro's profit exceeded forecasts of about 7.8 billion rupees by analysts, and also beat its own projection of revenue from global information-technology services. Wipro said it won several large multi-year deals during the quarter, including two with a combined contract value of 435 million dollars, to counter a steep 12 percent appreciation in the value of the rupee this year that dented export revenue.
It added 59 new clients during the quarter and also completed the acquisition of Nasdaq-listed outsourcing firm Infocrossing, which it bought in August in the most expensive overseas purchase by an Indian technology firm.
"The results for the quarter demonstrate strong execution by Team Wipro on all fronts," said chairman Azim Premji. "Revenues from our global IT services at 796.5 million dollars for the quarter were ahead of our guidance of 777 million dollars."
"The deal pipeline continues to be robust," added Premji, whose 80 percent holding in Wipro makes him one of India's richest men. For the quarter ending December 31, Wipro forecast revenue of 905 million dollars, and Premji downplayed concerns of a US economic slowdown that may force US firms to tighten their belts and cut their IT budgets.
US companies plan their budgets in November and December, and "my personal judgement is that there won't be any impact," he said. On the Mumbai stock exchange Wipro closed up 4.1 rupees or 0.83 percent at 500.5, from the previous close of 496.45, as the broader market plunged on concerns over capital controls.
Premji has built Wipro into one of India's biggest IT companies from a maker of soaps, riding on an outsourcing wave by US firms that sought to cut costs by tapping the country's large engineering talent pool and low wages.
The company's revenue grew at three times the industry average during the first half. Its India, Middle East and Asia-Pacific business recorded 72 percent growth in revenue during the quarter. The depreciation of the dollar against the rupee shaved 15 billion rupees off Wipro's revenue in the first half, said chief financial officer Suresh Senapaty.
"Our performance on profitability demonstrates the resilience of our business," he said. "It helped us not only fully mitigate the adverse impact on account of offshore salary increases but also deliver an operating margin expansion of 80 basis points."