Wipro Q1 profit up 11 percent on higher outsourcing demand

Wipro Q1 profit up 11 percent on higher outsourcing demand

Summary: India's third largest outsourcing firm booked a net profit of 16.2 billion rupees (US$275 million), on the back of increased signs of higher confidence among clients leading to a pickup in deals.

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TOPICS: Outsourcing, India
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Indian outsourcing giant Wipro is seeing a pick up in customer confidence which helped boost demand and earnings during its first quarter.

"We are seeing higher confidence among our clients on the backdrop of positive macroeconomic developments, particularly in the U.S," said Wipro's chairman Azim Premji, in a press release on Friday. The U.S. counts as the firm's largest market.

For the first quarter, Wipro posted a 11 percent rise in net profit to 16.2 billion rupees (US$275 million). This was on the back of a 5 percent increase in revenue at 97.3 billion rupees (US$1.64 billion).

wipro
(credit: Wipro)

Its positive outlook echoes that of rival Tata Consultancy Services (TCS), which turned in a solid quarter of 10 percent profit growth on the back of increased business. Wipro forecasts revenue for the current quarter to rise to as much as US$1.65 billion in the current quarter ending September.

"We are seeing a pickup in large deal closures which has reflected in strong order book in the current quarter. Our clients look to technology to pursue growth and profitability and increase organizational agility," said T. K. Kurien, CEO of Wipro.

Suresh Senapaty, chief financial officer at Wipro, noted the company's investments in client mining had shown benefits with strong growth in our top clients. "We have given wage hikes for both onsite and offshore employees effective June 2013, which has impacted our operating margins in the [current] quarter," he added.

Topics: Outsourcing, India

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Loves caption contests, leisurely strolls along supermarket aisles and watching How It's Made. Ryan has covered finance, politics, tech and sports for TV, radio and print. He is also co-author of best seller "Profit from the Panic". Ryan is an editor at ZDNet's Asia/Singapore office.

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