Indian software services provider Wipro Ltd. (WIT) reported Thursday a profit for the second quarter that grew 24 percent from last year, helped by revenue growth amid client additions. In dollar terms, earnings per share matched analysts' expectations, while quarterly revenues topped their estimates. Further, Wipro projected a sequential revenue growth for IT Services in the third quarter.
"Our focus on driving significant operational improvements has helped us predominantly mitigate the incremental impact of wage increases and currency volatility," Executive Director and CFO Suresh Senapaty said in a statement.
The Bangalore, India-based company reported net income attributable to equity holders of 16.11 billion rupees or 6.55 rupees per share and in dollar terms $304 million or $0.12 per share, up from last year's 13.00 billion rupees or 5.31 rupees per share. Wipro reports results on the basis of International Financial Reporting Standards.
Excluding the impact of accelerated amortization of stock based compensation, adjusted net income attributable to equity holders totaled 15.98 billion rupees or $302 million.
On average, six analysts polled by Thomson Reuters expected the company to earn $0.12 per share for the second quarter. Analysts' estimates typically exclude special items.
Wipro's first-quarter net income attributable to equity holders was 15.80 billion rupees or 6.43 rupees per share.
Total revenues for the second quarter grew 17 percent to 106.57 billion rupees or $2.01 billion, from 90.94 billion rupees in the same quarter last year, but were flat with the previous quarter's 106.53 billion rupees. Seven Wall Street analysts had a consensus revenue estimate of $1.91 billion for the quarter.
IT Services revenue in rupee terms was 83.73 billion rupees, or $1.58 billion, a year-over-year increase of 23 percent. The company's guidance was for revenues between $1.52 billion and $1.55 billion.
IT Products revenues declined 10 percent, while consumer care and lighting revenues increased 26 percent from a year ago.
Wipro said its IT Services added 53 new clients in the quarter and also reported net addition of 2,017 employees in the second quarter in IT Services.
Looking ahead to the third quarter, the company expects revenues from IT Services business to be in the range of $1.56 billion to $1.59 billion.
Earlier in the day, Wipro board of directors approved the planned demerger of its non-IT related businesses to be spun-off into a separate unlisted company, Wipro Enterprises Ltd. Meanwhile, Wipro Ltd. will remain listed and focus on the business that generated 86 percent of revenue and 94 percent of operating profit in fiscal 2011-2012.
The company noted that appointed date for the demerger is April 1, 2012, and the demerger is expected to be completed by the next fiscal year. The demerger is subject to Indian court approval and regulatory approvals.
"We have chartered a new course for Wipro by demerging our diversified Non IT businesses. I am confident that the demerger will enhance value for all our stakeholders and provide fresh momentum for growth for each of our businesses," Chairman Azim Premji added.
Wipro's Bangalore-based peer, Infosys Technologies Ltd. (INFY) reported on October 12 a 5 percent increase in profit for the second quarter to $431 million or $0.75 per ADS, helped by marginal 2.9 percent revenue growth to $1.80 billion from last year. The group added 39 clients during the quarter.
WIT closed Thursday's regular trading session at $8.61, up $0.89 or 11.53% on a volume of 1.10 million shares.
Wipro is currently trading on the Bombay Stock Exchange at 367.90 rupees, up 6.50 rupees or 1.80% from the previous close on a volume of 0.12 million shares.
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