Oct. 26, 2009 (The Hindu Business Line) --
Wipro had forecast a marginal growth in its IT business at $1,035-1,053 million for the second quarter.
However, a better than expected performance by larger peers such as TCS and Infosys has raised the expectation for the sector, and the street expects Wipro to clock higher numbers.
For the June quarter, Wipro had reported a net profit of Rs 1,016 crore on revenues of Rs 6,274 crore.
An average of five analysts’ estimates indicate that Wipro’s consolidated revenues would grow to Rs 6,621crore, while net profit may increase to Rs 1,065 crore over the previous quarter.
Analysts see cross currency benefits with a marginal improvement in IT services operating profit margins.
“Wipro has been doing well in the BFSI sector in the past couple of quarters even as some of the other players were recovering.
It is expected it will continue to do well in this sector, besides gaining from utilities and healthcare,” said an analyst.
Vendor consolidation
Wipro, like TCS and Infosys, is also seen benefiting from vendor consolidation exercise at large clients such as BP Plc, Nokia (NYSE:NOK) Siemens (NYSE:SI) Network and Aviva.
Wipro, which was more aggressive announcing deal wins during the quarter compared to rivals, added new customers such as Aquarion Water Company, All Nippon Airways, Fosters, Unitech Wireless, Charming Shoppes Inc (NASDAQ:CHRS) and Delhi International Airport Ltd among others.
HSBC Global research in a recent note to clients noted that Wipro has the most defensive revenue profile among its larger peers — the company earns 21 per cent from infrastructure management, 12 per cent from testing, 10 per cent from BPO and 39 per cent from application, development and maintenance.
Mr Rajiv Mehta, IT analyst with India Infoline (OOTC:IIFOF) , expects the company to report a sequential growth of 11 per cent in net profits and 3 per cent jump in revenues. Such a growth would help the Wipro stock to sustain at the current level. For a sharp positive reaction from the street, the growth numbers have to be higher than this, Mr Mehta said.
