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WIPRO

Although Wipro’s consolidated numbers for the December quarter do show an improvement on a year-on-year basis its growth rates completely lack momentum. Total income for the quarter at Rs 1,130 crore (Rs 894.33 crore) was 26 per cent above the year-ago period, while sequentially it went up by just about 5 per cent over the September quarter income of Rs 1,079.08 crore.

Its net profits for the quarter stood at Rs 230.60 crore (Rs 223.51 crore), up by just about 3 per cent both on a year-on-year, as well as, on a sequential quarter basis. Net income from operations at Rs 1,108 crore (Rs 8,67.33 crore) was up 28 per cent over the previous corresponding quarter, while sequentially the same went up 5 per cent. The global IT services contributed close to 67 per cent to the total operational income, while India and Asia Pacific IT services and product sales contributed 17 per cent.

The rest came from consumer care and lighting, IT-enabled services, healthcare and life sciences business. At Rs 859 crore (Rs 651.13 crore) the operating cost went up by 32 per cent over the previous corresponding quarter. Sequentially it was up 4 per cent over the September quarter costs of Rs 826.48 crore.

Operating profit moved up 15 per cent over the previous corresponding quarter to Rs 249 crore (Rs 216.20 crore). Sequentially, the rise was 10 per cent over the September quarter profit of Rs 225.91 crore. The operating profit margin, however, was down 3 percentage points from the last year’s level and is marginally up from the 21 per cent it reported during the preceding quarter.

Overall the total costs were up by 33 per cent over the previous corresponding quarter and 4 per cent over the preceding quarter.

Wipro’s IT services business recorded a net turnover of Rs 745 crore up 22 per cent from the previous corresponding quarter and 10 per cent over what it earned during the preceding quarter.

The PBIT for the quarter grew just 0.33 per cent over the previous corresponding quarter and 5 per cent over the preceding quarter.

It completed the acquisition of its BPO subsidiary, Spectramind, during the quarter having bought out the balance stake.

The stock currently trades at a PE of 37 times against its December quarter annualised earnings per share of Rs 40.70. Too expensive for a company growing at 3 per cent.

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