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Wipro Q2 Profit Up 28.5%, Beats F'cast

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Wipro Ltd, India's third-largest IT services exporter, beat analyst estimates with a 28.5 per cent rise in quarterly profit thanks to higher spending by its biggest clients.

Wipro said revenue in its main IT services business in the three months to December 31 will grow in a range of 1.8-3.6 per cent in dollar terms from the previous quarter, up slightly from an analyst estimate of 1.5-3.5 per cent.

Consolidated net profit for the second quarter ended September 30 rose 20 per cent to Rs 1,932 crore from Rs 1,504 crore a year earlier, Wipro said in a statement after the close of markets on Tuesday, 22 October.

That compares with the Rs 1860 crore mean estimate of 29 analysts surveyed by Thomson Reuters I/B/E/S.

Wipro said revenue at its 10 biggest customers rose by 4.1 per cent from the previous quarter, faster than its overall IT services sales growth of 2.7 per cent.

Rivals Tata Consultancy Services Ltd and HCL Technologies Ltd also beat analyst estimates for September quarter profits, whereas profit at Infosys Ltd was pulled down by a one-off provision.

The city-headquartered firm had posted a net profit of Rs 1,610.6 crore in the year-ago period, it said in a BSE filing.

Consolidated revenues in the July-September quarter this fiscal rose by 19 per cent to Rs 11,331.9 crore from Rs 9,528 crore in the same quarter of 2012-13 fiscal.

Commenting on the performance, Wipro Chairman Azim Premji said: "There are positive indicators on the global economy.

Client confidence is on the uptick and we see it reflected in our results."

In US dollars, Wipro's net profit stood at $309 million in the second quarter this fiscal, while consolidated revenues were at $1.76 billion during the quarter.

"We achieved a broad based revenue growth across all industry verticals and continue to focus on executing to our strategy," Wipro CEO T K Kurien said.

Its IT services revenue rose 5.9 per cent year-on-year to $1.63 billion, whereas sequential revenue growth stood at 2.7 per cent. In rupee terms, IT Services revenues stood at Rs 10,068 crore in the quarter under review.

Wipro, which does not give annual forecasts, had guided to $1.62-1.65 billion IT service revenue in second quarter.

"Our sustained execution towards increasing operational efficiencies in the business coupled with currency benefits helped offset the impact of wage hikes resulting in strong improvements in operating margins," Wipro Ltd CFO Suresh Senapaty said.

On outlook for October-December quarter, Wipro said: "We expect revenues from our IT Services business to be in the range of $1.66-1.69 billion."

Shares of Wipro closed at Rs 514.90 apiece, up 1.67 per cent from its previous close at BSE.


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