The company’s net profit shot up 40% to Rs 745 crore (US GAAP) over last year on improved operational efficiency and higher profits from acquisitions. Revenues were up 43% at Rs 3,964 crore.
BANGALORE: Despite tremendous pressure on its profitability due to wage hikes and rupee appreciation, software major Wipro Ltd on Wednesday reported profits well in excess of street and analyst expectations for the quarter ended December 31.
The company’s net profit shot up 40% to Rs 745 crore (US GAAP) over last year on improved operational efficiency and higher profits from acquisitions. Revenues were up 43% at Rs 3,964 crore.
According to a leading international broking house analyst, the software company’s profit was ahead of his expectation of Rs 714 crore. It also beat the street’s bet at Rs 718 crore.
However, Wipro’s earnings before interest, depreciation, tax and amortisation (EBIDTA) margin suffered a little as it dipped 60 basis points on account of wage hike (180 basis points), forex fluctuations (20 basis points) and less billing days (20 basis points).
“We were able to offset some of the negative impact on EBIDTA due to the accounting difference in the Indian and US GAAP, which gave an advantage of 30 basis points. Profits from acquisition provided some relief,” said Suresh Senapathy, executive vice-president, finance, and chief financial officer, Wipro Ltd.
Interestingly, the two other IT majors - Infosys and TCS - that have already announced results for the quarter, reported a jump in EBIDTA margins by 60 basis points and 90 basis points, respectively.
Wipro raised the salary of offshore employees by 10-15% last quarter. Senapathy said its profit & loss account would again be impacted by 1.2% this quarter with the implementation of wage increment of around 3-4% for onsite employees.
The break-up of global IT revenues between onsite and offshore for the quarter was 54.9% (53.1%) and 45.1% (46.9%). The third-largest IT firm was able to reduce attrition rate to 16.2% in the quarter from 17.6% last year.
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