Wipro profit up 18 percent on strong demand
MUMBAI, India (AP) — Wipro reported an 18 percent rise in December quarter profits Friday, beating expectations as global cost-cutting drives global businesses to Indian outsourcing companies.
India's third-largest outsourcer said it earned 17.2 billion rupees ($313 million) in the October to December quarter on revenue of 110.3 billion rupees ($2.0 billion), a rise of 10 percent from a year earlier.
Analysts polled by FactSet had forecast net profit of $301 million on revenue of $2.0 billion.
Wipro's rivals Tata Consultancy Services and Infosys also reported strong earnings for the quarter, fueling hopes of a revival in technology spending, despite global uncertainties.
"While the overall mood on economic growth continues to be muted, global corporations continue to leverage technology to drive revenues and productivity," chairman Azim Premji said in a statement.
Europe was a bright spot for Wipro, with growth from the region up 7.5 percent from the prior quarter, while business from the Americas slid 0.7 percent.
Wipro said revenue from its core information technology services business grew 4.8 percent from a year earlier to $1.58 billion. The company predicted those revenues would rise by a maximum of 3 percent this quarter, over the December quarter, weighed on by political uncertainty over the U.S. debt ceiling.
Executives said volumes slid in the December quarter from the prior quarter, but prices increased over 3 percent.
The stock was down nearly 5 percent in midday trading in Mumbai, reversing gains made earlier this week.
"The volume performance is much lower than that reported by peers," said Dipen Shah, head of private client group research at Kotak Securities. "We expect the stock to attract better valuations once volume growth starts improving."