Oct. 19 (Bloomberg) -- Wipro Ltd., India's third-largest computer-services provider, forecast record sales for the third quarter after higher prices, acquisitions and new contracts helped profit gain 17 percent in the past three months.

Revenue at Wipro's global computer-services unit, which accounts for about 69 percent of sales, will rise to $905 million in the current quarter, the Bangalore-based company said in a statement today. Net income in the three months ended Sept. 30 rose to 8.12 billion rupees ($204 million).

Wipro, Tata Consultancy Services Ltd. and Infosys Technologies Ltd. raised prices as wage increases and the rupee's gains crimped earnings in the U.S., their biggest market. The acquisition of New Jersey-based Infocrossing Inc. boosted Wipro's sales and helped it win a $275 million contract.

``Pricing power is still in the hands of larger IT companies, and Wipro is seeing the benefits of acquisitions it did in the past two quarters,'' said Deven Choksey, chief executive officer at K.R. Choksey Shares & Securities in Mumbai, who manages $500 million including Wipro shares. ``But the rupee factor is likely to keep large investors from taking larger exposure in IT companies for some time.''

The Indian rupee, which rose 8.4 percent against the dollar in the six months ended Sept. 30, reduced profitability at the global IT unit. Operating profit as a percentage of sales shrank 240 basis points from a year earlier to 22.1 percent for the second quarter, Wipro said today.

Shares of Wipro fell 5.45 rupees, or 1.1 percent, to 491 rupees at 2:13 p.m. local time on the Bombay Stock Exchange, after earlier gaining as much as 2.7 percent.

The stock has declined 19 percent this year, the worst- performing software maker on India's benchmark Sensitive Index, which has gained 29 percent.

Global Unit Sales

Net income for the second quarter matched the median estimate of seven analysts' estimates. Total sales including soaps, light bulbs and consumer goods rose 35 percent to 47.3 billion rupees. Earnings are based on U.S. accounting rules.

Revenue from the Global IT unit, which manages computer networks and call centers, rose to $796.5 million, beating the company's July forecast of $777 million.

The software exporter doesn't provide forecasts for total sales and profit.

Wipro boosted prices on new contracts by as much as 5 percent, and on renewal of existing contracts by 2 percent to 5 percent, Chief Financial Officer Suresh Senapaty said in an interview today. Billing rates will continue to have an ``upward bias,'' he said, declining to be more specific.

New contracts won in the quarter included a $275 million order awarded by Missouri HealthNet program to Infocrossing, which was acquired in September for about $609 million.

Acquisition of Infocrossing

The purchased business, which gave Wipro 900 workers in five U.S. data centers and clients such as Sunoco Inc., the largest oil refiner in the U.S. Northeast, and Swiss drugmaker Novartis AG, added $6.4 million to Global IT sales in the second quarter, and will contribute $60 million in the third quarter.

Wipro said it won a $50 million order from a U.S.-based insurer in the second quarter, without identifying the company.

The exporter added 5,341 new jobs for its Global IT unit during the quarter to end September with 77,478 employees. The rate of employee defections at the unit narrowed to 17.9 percent from 20.1 percent in the first quarter, Wipro said today.

Wipro, which usually increases salaries in the last three months of the calendar year, in July said it would boost wages for workers in India by 12 percent to 14 percent on Aug. 1, bringing forward the schedule to retain more employees.

Salary increases next year will be less than pay hikes given this year, Pratik Kumar, head of human resources, said in an interview in Bangalore today.

Tata Consultancy and Infosys, India's two largest software- services provider, raised salaries during the quarter started April 1.

Appreciating Rupee

The strengthening rupee, Asia's best performing currency in the last two quarters, caused Infosys, India's second-largest software exporter, on Oct. 11 to forecast full-year earnings that missed some analysts' estimates.

Market leader Tata Consultancy on Oct. 15 reported a 26 percent gain in second-quarter profit, the slowest growth in seven quarters, because of the rupee's appreciation.

To contact the reporters on this story: Chitra Somayaji in Bangalore at csomayaji@bloomberg.net; Harichandan Arakali in Bangalore at harakali@bloomberg.net.

Last Updated: October 19, 2007 06:05 EDT