'Strong' Rupee brings down Wipro profits

Bangalore, July 19: With 'strong' Rupee hitting its margins, Wipro Ltd, the country's third largest IT exporter today reported a 16 per cent surge in its net profits in the first quarter of 2007-08, two per cent down from the corresponding period last year.

The total revenue rose by 34 per cent at Rs 4203 crore during the quarter.

The Rupee which had firmed up by nearly nine per cent in the recent times had hit exporters, mainly the Indian IT companies hard and Wipro too was adversely affected with company CFO Suresh Senapathy said. Rising wage costs was the other factor of the falling margins for the IT exporters.

Commenting on the performance Wipro Chairman Azim Premji said "the results for the quarter are satisfying considering the strong headwinds faced by us in the form of an appreciating rupee. Our IT Services Business continued to witness broad based growth, across Verticals, Geographies and Service lines".

He said the revenue growth was primarily driven by strong volume growth across all business units.

Company Chief Financial Officer Suresh S Senapathy said the company was 'satisfied' with the sequential revenue growth of 5.1 per cent in Global IT Services segment, which included 4.9 per cent growth in revenue of IT Services and 7.1 per cent growth in BPO services. "This has been the worst period for exporters who suffered under the foreign exchange impact. Still our performance has been good despite big jerks. Due to hardening of the rupee our margins was affected by 3.4 per cent during the quarter," he said.

He said the Global IT Services and Products revenue was 726.1 million dollars, which was ahead of the guidance of 711 million dollars.

The New York Stock Exchange-listed Wipro gets 65 per cent of its revenue from the US while Europe contributed 30 per cent.

The company added 4319 employees on net basis in Global IT services, which comprised of 2719 employees in IT services and 1600 in BPO. 2400 freshers were picked up from campus selections. "We are giving more importance to campus hiring and we have so far visited 550 campuses in the country," he said.

Service line emerged as the best performer for the company with its BPO organ bringing a lot of success with 40 per cent growth, he added.

UNI