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Wipro outlook points to uneven recovery for IT outsourcers

* Company reports 17% rise in Q4 net but revenue guidance for June quarter muted

Written by Reuters | Bangalore | Published: April 20, 2013 1:53:30 am

Wipro Ltd’s weaker-than-expected quarterly sales forecast highlighted a gap in performance among India’s four biggest IT exporters and a still shaky recovery in client demand.

Wipro,India’s third-largest software services provider,joined the country’s second-largest IT firm,Infosys Ltd,in delivering tepid revenue guidance,citing a delay in the closure of deals. The forecasts contrast with a more bullish outlook issued by industry leader Tata Consultancy Services (TCS) that had raised expectations IT spending by clients in the United States and Europe was improving.

“If Wipro had been able to make a recovery,then it would have told you that there is a rising demand tide that is lifting most of the boats,” said Kuldeep Koul,an analyst at ICICI Securities in Mumbai.

Wipro projected fiscal first-quarter revenue for its IT services business in a range of $1.58 billion to $1.61 billion — a decline of 0.6 per cent to a rise of 1.6 per cent over the previous quarter. Analysts had expected a rise of 1 to 4 per cent.

In its fourth quarter ended March 31,Wipro’s consolidated net profit rose 17 percent to Rs 1,729 crore from Rs 1,481 crore a year earlier.

A more sanguine TCS,which does not issue specific revenue guidance,said it expects full-year revenue growth to beat the forecast issued by the National Association of Software and Services Companies (Nasscom).

Nasscom expects export growth in the fiscal year that started this month of 12 to 14 per cent,a figure widely used as a proxy for overall industry growth. In the just-completed year,export revenue in the $108 billion sector rose 10.2 per cent.

Further ratcheting up what is already a competitive sector,US-listed Cognizant Technology Solutions Corp has been steadily gaining market share.

“Very clearly Cognizant and TCS are going in one direction — TCS is much ahead and then there’s also HCL Technologies,and Mahindra Satyam if you look at their last few quarters,” said Sudin Apte,CEO of Offshore Insights,an outsourcing advisory firm based near Mumbai.

I have given 25% of my wealth to charity: Premji

Bangalore: Wipro chairman Azim Premji said he has already given more than 25 per cent of his personal wealth to charity,but acknowledged it’s not easy to use money well in philanthropy.

“I have very clear views on what I intend to give to charity and today more than 25 per cent (of my personal wealth) has already been given to charity,” Premji said.

“…very often,it’s more difficult to use money well in philanthropy than instituting money into philanthropy. We want to be sure that we continue to use it well and we don’t continue to substitute the responsibility of government and that’s very critical,” he added. PTI

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