MUMBAI: India’s No.3 software services provider Wipro posted an 18 per cent gain in quarterly profit, joining bigger rivals Tata Consultancy Services (TCS) and Infosys in reporting better-than-expected earnings.
Wipro, whose customers include Apple and BP, said net profit for the three months ended December rose to 17.16 billion rupees ($316 million) from 14.56 billion rupees a year earlier. That compares with the average estimate of 16.45 billion rupees in a poll of 20 analysts, according to Thomson Reuters data.
Strong third-quarter results by Infosys, Tata Consultancy and HCL Technologies have led investors to anticipate more good news from the industry. Even before Wipro announced its earnings, UBS on Thursday upgraded its stock to ‘buy’ from ‘sell,’ confident that the software services export sector is headed for a recovery.
“We have seen broad-based growth in the quarter with all our verticals growing sequentially,” T.K. Kurien, chief executive of Wipro’s IT business, said in a statement on Friday.
Economic uncertainty had led to concerns that clients in the United States and Europe, which account for more than 75 per cent of India’s IT outsourcing revenue, will continue to hold back on IT spending.
Research firm Gartner now says worldwide IT services spending will rise 5.2 per cent to $927 billion in 2013, compared with growth of 1.8 per cent in 2012.
In the quarter ended December, Wipro’s IT business revenue in dollar terms rose 2.4 per cent from the September quarter to $1.577 billion, meeting its own guidance of 1.2 to 3.5 per cent.
For the three months ending March, Wipro said IT business revenue will be between $1.585 billion and $1.625 billion, or a sequential gain of 0.5 per cent to 3 per cent. That compares with analysts’ expectations of a 1 per cent to 3.5 per cent increase.