Wipro Information Technology Sales May Rise 4% on New Orders From Clients
Wipro Ltd. (WPRO) forecast fiscal third- quarter revenue at its information-technology services business may climb as much as 4.1 percent to $1.53 billion from the previous period as India’s third-largest software exporter wins more business from existing customers.
Revenue from the IT services business may range between $1.5 billion and $1.53 billion this quarter, the Bangalore-based company said today. Sales at the unit, which contributed 76 percent of revenue in the last fiscal year ended March 31, were $1.47 billion in the three months ended Sept. 30, Wipro said.
Wipro shares climbed in Mumbai, headed for their highest in almost three months, after the software provider posted an 18 percent sales jump and said five customers now contributed more than $100 million each annually. Wipro joins larger competitors Infosys Ltd. and Accenture Plc in signaling demand for software maintenance and advisory services remains buoyant.
“Growth was broad based, across several business verticals and geographies,” said Pratik Gandhi, an analyst at IDBI Capital Markets Services Ltd. in Mumbai. “It’s been the highest volume growth they’ve seen in the past four quarters; that’s very impressive,” said Gandhi who rates Wipro “hold.”
Wipro gained 2 percent to 381.50 rupees as of 11:48 a.m. in Mumbai trading, poised for its highest close since Aug. 2. The stock was the best performer today on the BSE India benchmark Sensitive Index, which declined 0.4 percent.
“We are continuing to see incremental progress in our client mining strategy,” Chief Financial Officer Suresh Senapaty said in a statement today. Wipro’s biggest customer is now poised to contribute more than $200 million in revenue, he said. The software provider last year reported it had one client with an annual revenue contribution in excess of $100 million in the three months ended Sept. 30, 2010.
Net income rose 1.6 percent to 13 billion rupees ($267 million) in the three months ended Sept. 30, as revenue rose to 90.9 billion rupees. Profit compared with the 13.1 billion-rupee median of 40 analysts’ estimates compiled by Bloomberg, while sales beat the 89.5 billion-rupee median of 43 analysts’ estimates.
Wipro, which provides services such as designing and building software programs, product-engineering and back-office support to companies including BP Plc (BP), William Morrison Supermarkets Plc. and Vodafone Group Plc added 44 new clients to take the total to 930 at the end of the last quarter.
Volume, or the number of man-months workers spend on projects for clients, grew 6 percent in the three months ended Sept. 30 from the previous period, Senapaty said. Tata Consultancy Services Ltd. (TCS), India’s biggest software exporter, had a 6.2 percent increase in volume last quarter, while second- ranked Infosys reported a 4.5 percent growth.
“We have seen growth momentum build up in our IT Business with healthy volume growth,” Chairman Azim Premji said in the statement. “Our focused investment strategy will get the business to a higher growth trajectory.”
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