Wipro Q1 profit up 20 per cent

Profit after tax touched Rs 428 crore for Q1 of 2005-06 for the third largest software firm and revenues for the quarter were logged at Rs 2,262 crore, while operating income to revenue for the quarter has been put at 24 per cent.

But there were dips in sequential profits and revenues. Compared to the last quarter of the previous financial year, Wipro’s profit before tax is down from Rs 482 crore to Rs 463 crore and revenues are down from Rs 2,312 crore.

Higher visa costs, currency appreciation and higher marketing and sales expenses dragged profits during the quarter, Wipro officials said on Friday.

Wipro has projected a much improved sequential performance, with revenue of $422 million — a 5.9 per cent growth over the current quarter.

During the first quarter, the company’s Global IT Service and Products which added 29 new clients, including Northern Gas Networks — with a 25 million pound order, continued to be its primary profit driver netting Rs 416 crore before tax and earning Rs 1,732 crore in revenue for the quarter.

The profit and revenue from Wipro’s Global IT Services, headed by vice-chairman Vivek Paul in the US who put in his papers this month, is up by 15 per cent and 29 per cent, respectively, year on year the company said.

‘‘Our global IT business continued to sustain momentum. IT services witnessed strong volume growths and improved price realisations during the quarter,’’ said Wipro Chairman Azim Premji.

Of the Global IT Services pie Wipro’s BPO services contributed 11 per cent of revenues, R&D Services 32 per cent and enterprise business 57 per cent. It added 2,097 employees during the quarter for its IT services business.

Revenues from the company’s Asia-Pacific IT business grew by 25 per cent to Rs 338.2 crore while its consumer care and lighting business leapt by 30 per cent to Rs 136.4 crore.

‘‘We need to drive in more productivity through lean, grow fixed price projects and add new lines of service offerings in the IT business to get to the top of the situation soon,’’ Premji said.

Wipro will also aim to increase the non-voice component in its nearly 85 per cent voice-based BPO business, company officials said.

‘‘Our mission is to build the non-voice business more aggressively,’’ CFO Suresh Senapaty said.

Growth in the BPO business is expected to be slow over the next quarter but will kick in by the last quarter, he said. Wipro hired 2,097 IT services staff in the first quarter, taking its headcount to 41,911.

In April Wipro came up with a one-for-one bonus share issue to top expected earnings.