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IT Major WIPRO beats Street expectations

, November 2, 2012, 0 Comments

IT major reported a consolidated net profit of 1611 crore rupees for Q2, up 1.9%  sequentially, on the back of steady operating profit margin, and uptick in pricing.

In the quarter gone by, Companies topline, fell short of expectations with the company posting net sales of 10,620 crore rupees, as against expectations of 10,860 crore rupees.

Earnings from Information Technology (IT) operations received strong support from the 1.2% uptick in pricing. During the quarter, price realisation improved 1.9% on quarter for onsite projects, and 1.5% for offshore projects.

Benefits from higher billing rates were offset to some extent by unfavourable currency movement, wage hikes and higher sales and marketing spend.

Our focus on driving significant operational improvements has helped us predominantly mitigate the incremental impact of wage increases and currency volatility – CFO Suresh Senapathy

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Wipro registered a foreign exchange gain of 169 million rupees during the quarter under review. It added 53 clients in its IT services business, and hired 2,017 employees. Net utilisation, excluding trainees, stood at 77.9%.

Region wise Break-up

US accounted for 51.5% of the company’s total revenue, while Europe made up 28.2%. India and West Asia, and Japan made up 8.6% and 1.1% of co’s revenue, respectively. Asia

Pacific and other emerging markets contributed 10.6% to the company’s total revenue.

Demerger of Non-IT business

The company plans to hive off its consumer care and lighting, infrastructure engineering, and medical diagnostic products and services businesses into a separate company – Wipro Enterprises Ltd.

The planned demerger will be effective retrospectively from Apr 1, 2012, and is likely to be completed in 2013-14 (Apr-Mar), subject to regulatory approvals.

WIPRO is the only IT company with operations other than IT. Company announced the hiving off of non-core operations.






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