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Wednesday, 12 May 2021 08:12 GMT

India's Wipro posts 28% jump in Q4 net profit


(MENAFN - Asia Times) Indian software services major Wipro has recorded a 27.78% net profit for the fourth quarter on the back of some prominent deal wins. The Bangalore-based firm announced results after market hours on Thursday.

Wipro reported a consolidated net profit of 29.72 billion rupees (US$397 million) for the January-March quarter against 23.26 billion in the same period last year. This is also marginally higher than the net profit in the preceding December quarter (29.68 billion rupees).

Wipro CEO and Managing Director Thierry Delaporte said: 'We delivered a third consistent quarter of strong revenue growth, deal wins and operating margins. We also announced our largest-ever acquisition of Capco that will bolster our global financial services sector.

'We are excited with this wave of business momentum that we are witnessing. All key markets are now growing on YoY basis and this provides us a solid foundation to build on next year's growth rates.'

Capco was Wipro's largest acquisition so far ($1.45 billion). The London-based consulting firm operates in the banking and financial services space and is spread over 30 locations, including India, the US, UK, France, Germany, Poland, Slovakia, Austria, Poland, Switzerland, Brazil, Singapore, Malaysia and Hong Kong.

Since Delaporte took charge as Wipro's CEO last July, the company increased its focus on Europe and made a series of acquisitions. They include German wholesaler Metro AG's IT unit ($700 million), engineering services firm Eximius Design ($80 million) and Encore Theme Technologies Private Ltd, a software-as-a-service firm ($13 million). Europe is Wipro's second-largest market and contributes 25.2% to its total revenue.

The company's consolidated revenue from operations climbed 3.4% to 162.45 billion rupees from 157.11 billion rupees in the year-ago quarter. This is also 3.67% higher than the preceding quarter (156.70 billion rupees). Its revenue from IT services stood at 163.34 billion rupees, against 158.10 billion rupees last year and 157.26 billion rupees in the preceding quarter.

Wipro Chief Financial Officer Jatin Dalal said: 'We delivered a 340 bps expansion YoY in operating margins for the quarter after absorbing the impact of the wage hike. On a full-year basis, we increased margins by 220 bps with a consistent improvement in operating metrics. Led by disciplined execution, we generated strong operating cash flows at 136.7% of our net income for the full year. We successfully completed the share buyback program, returning $1.3 billion to our shareholders.'

The software major added one client in the more than $100-million category, three in the over $75-million band and two in the over $50-million category. The company added 52 customers during the quarter, taking the total active client count to 1,120 at the end of March 2021.

Earlier in the week, Wipro's rivals Tata Consultancy Services and Infosys declared their fourth-quarter results. Tata Consultancy Services reported a 14.9% rise in net profit at 92.46 billion rupees, and its revenue went up 9.4%, while Infosys posted a 17.1% rise in net profit at 50.78 billion rupees and recorded 13.08% growth in revenue.

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