Mumbai: IT major, Wipro has declared its second quarter results. The company's net profit was up 12.83 per cent at Rs 700 crore (Rs 7 billion) from Rs 620.4 crore (Rs 6.20 billion), quarter-on-quarter, QoQ. Its revenues were up 12.84 per cent at Rs 3546 crore (Rs 35.46 billion) from Rs 3,142.5 crore (Rs 31.42 billion).
Speaking on the excellent results posted by Wipro, the company's CFO Suresh Senapati said, "I think it was a very satisfying last quarter that we had, because the volume growth has been good in terms of 7.9 per cent. We also had a little up-tick in terms of blended prices. We had an overall revenue growth at Wipro limited level of 41 per cent and 46 per cent on the net income basis and if one looks at the global IT services business, it has grown pretty well."
The management informs that Q3 global IT guidance will not factor in any acquisition. Senapati adds, "We are talking about a guidance to growth of 7.5 per cent without any new acquisition that is likely to come in the current quarter as compared to the last guidance that we had given."
He further states, "In the last quarter, there were two acquisitions, which came in during the course of the last quarter including one acquisition, which was partly impacted in Q1 and fully impacted in Q2. This itself speaks for good outlook that we have embedded in our guidance in Q3 and Q4, which is generally a decent quarter. We keep giving guidance on QoQ. But on a medium basis, it looks very robust and outlook is good and encouraging."
The management believes that salary hikes could impact margins by 200 bps in Q3.
Suresh Senapati said, "I think the momentum vis-à-vis performance excellence has been taking higher level of intensity. Yes, we will have an impact of about 2 per cent in Q3 for the balance impact of the compensation."
On being quizzed about the pricing scenario, Senapati explains, "On a summary basis, I would say that pricing environment is stable. We had got some of the contracts for renewals, where we have generally got a favourable response from the customers for price increases."
He also says, "The new customers are coming in at better pricing but when you talk of realisation, it is always a mixed function of what kind of practices you are offering and onsite, offshore etc. So while it could change on a narrow basis, on a red card basis, we are seeing a positive bias in the pricing."
The company's President-IT Practices, Suresh Vaswani elaborates on the deals that the company has to its credit,
"Regarding our total outsourcing business, which we launched last quarter, we have had two wins in the global market this quarter - one from US consumer products company and the other one from a utility company based in UK. We’ve also had two total outsourcing contract wins in India on the back of several wins we’ve had in the last couple of quarters."
On concluding lines, Suresh Senapati states, "It is good that the total outsourcing deals that we launched a few years back is gaining a lot of traction and these two wins are very good. We have also launched it on a global basis and there also the kind of pipeline that we are talking about and the wins last quarter and the earlier quarter have been good. That has been one of the factors for good growth in Q2 and we look forward to similar good growth Q3 onwards."
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