Beating its own guidance and market analyst's forecast, Wipro Limited, on Friday, announced a net profit of Rs 1,319 crore, registering a YoY growth of 31 per cent for the first quarter (Q1) of fiscal year 2010-11 ended on June 30, 2010 as compared to corresponding period last year.

IT services business, major contributor of revenue, also showed significant growth of 14 per cent at Rs 5,500 crore.

Increased demand from regions like US, India, APAC, emerging countries and new customer addition helped the company register a revenue growth of 16 per cent year-on-year (Y-o-Y) at Rs 7,236 crore compared to the same period last year.

The earnings before interest and tax for IT services business stood at Rs 1,350 crore which is 26 per cent (Y-o-Y) higher than year ago period. In dollar terms, IT services revenue witnessed sequential growth of 3.2 per cent at $1,203.7 million against $1,165.9 million. Briefing reporters, Chairman Azim Premji said "we are seeing strong demand environment across our industry verticals despite macro challenges. We added the highest number of billable employees ever, in this quarter."

The IT product business recorded Q1 revenue of Rs 832 crore witnessing a YoY growth of 13 per cent. "We delivered ahead of top end of our guidance in constant currency with a sequential growth and saw yet another quarter margin expansion with a 30 basis points increase despite the head winds of wage increase and a decline in price realisation," said Wipro Chief Financial officer Suresh Senapathy.

The currency volatility and Euro crisis dented Wipro's revenue generation from European regions significantly. But the company continues to witness a strong business pipeline from the region. North American continent still remains as major growth region and grew 4.3 per cent sequentially; interestingly India and Middle East grew 5.4 per cent, while APAC and emerging markets grew 5.6 per cent sequentially. The company added 22 new clients into its kitty during the quarter including Magyar Telekom.

Lighting and consumer care business also showed tremendous growth in the quarter. The division's revenue was at Rs 641 crore registering a growth of 23 per cent. Going forward, the company said its revenue from IT services business for second quarter ending September 30, 2010 would be in the range of $1,253 million to $1,277 million, a sequential increase of 4.1 per cent to 6.1 per cent.

Staff hirings
The IT services arm of Wipro made a net addition of 4,854 employees in the current quarter taking the overall headcount to 112,925 as on June 30, 2010. However, the attrition rate jumped to 15.8 per cent during the April-June period. On a quarterly basis, the voluntary attrition rate was up at 23 per cent where BPO alone accounted 16 per cent of the attrition.

The company hiked the salary of the employees in February and also has plans to initiate promotion process of the employees. The company is also planning various initiatives to tame attrition rate. "We have done some restructuring. In case of employees with 3-7 years of experience, over 20,000 people have been promoted since July 1," said Suresh Senapathy.

Source: DHNS