WIPRO Q3FY10 Result Update

Sales remain flat sequentially during 3QFY10, primarily on account of muted performance from its IT services and IT product segments.

Operating margins expand by 0.6% QoQ. This is on the back of cost containment measures and improved volumes.

Net profits grow by 5% QoQ during the quarter on the back of lower interest and depreciation charges, coupled with higher share of gains from associates.

Employee strength of the IT services business stood at 102,746 at the end of December 2009. IT services added 4,855 (net) employees during 3QFY10.

Wipro’s topline grew marginally by 0.3% QoQ during 3QFY10. This was primarily on account of muted performance in the IT services and products businesses. The IT services business, which contributed 74% to the company’s total sales, grew by 3.4% QoQ. The IT products business (14% of sales) could not match up the robust growth witnessed in the last quarter and saw a sequential decline of 15% QoQ.


Further, Wipro’s consumer care and lighting business (9% of sales) grew by around 3% QoQ during 3QFY10. In terms of industry verticals, the company registered robust business in the healthcare services and energy and utilities verticals, which contributed nearly 9% and 10% respectively to the consolidated IT services revenue during 3QFY10. The company also witnessed an uptick in demand in the financial services and media and telecom segments. The company witnessed a decent performance for its application development and infrastructure services. However, the performance remained muted for package implementation and testing services.
IT services adds 31 new clients during the quarter.

In terms of geographies, revenues from Wipro’s major market for IT services i.e., the US (43% of the topline) saw a decline of 2% QoQ. India (22%) also declined 12% QoQ during the quarter. However, sales from the European markets (21%) grew by 5.4% QoQ. Sales from rest of the world (14%) surged by 27% QoQ.


Wipro’s operating margins expanded by 0.6% QoQ during 3QFY10. This can be credited to better utilisation levels, cost containment, aided by a push towards offshoring. However, currency fluctuation impacted the margins negatively.

Wipro reported a decent 5% QoQ growth in net profits during 3QFY10. This was mainly aided by better operating margins and increased share of profits from associates.