Bangalore, April 16: For the second time in a week, the country’s technology hub had reasons to celebrate as Wipro Ltd today joined the exclusive club of infotech firms with a billion-dollar revenue. The IT behemoth posted record revenues of $1.2 billion from its combined IT services and products business for 2003-04.
The board has also recommended a bonus issue of two shares for each one held (2:1) for its shareholders. It has declared a total dividend of Rs 29 per share. An AGM will formally ratify the bonus issue in June.
On Tuesday, Infosys Technologies Ltd celebrated its billion-dollar status with a dollar treat for its employees across the world. TCS Ltd, an unlisted company, is the third in the club.
The global IT services business of Wipro alone generated $1 billion, accounting for 74 per cent of the group’s total revenue of $1.35 billion (Rs 5881.2 crore), an increase of 36 per cent from Rs 4338.3 crore in 2002-03. “In 2003-04, we made a significant progress towards our goal of being the preferred provider of comprehensive solutions for our customers,” Wipro chairman Azim Premji said.
Premji said 2003-04 was a landmark year in many ways for Wipro. “Our strategy to remain focused in technology business paid rich dividends this year, as our telecom original equipment manufacturing (OEM) practice lead our growth with a 53 per cent year-on-year revenue growth,” he said.
Premji said the prospects for 2004-05 looked exciting. “Looking ahead, for the quarter ending June, we expect our revenue from the global IT services business to be approximately $292 million,” he added, indicating that the trend of offshore outsourcing will continue and “perhaps accelerate”.
Beating its own guidance quarter-on-quarter, Wipro’s flagship division — global IT services and products — posted a revenue of Rs 4,357 crore, up 43 per cent over Rs 3,048 crore in 2002-03 and a profit before tax (PBT) of Rs 954.0 crore, up 13 per cent year-on-year.
The group’s profit after tax shot up by 26 per cent to Rs 1031.5 crore from Rs 820.5 crore in 2002-03.
For the fourth quarter ended March 31, Wipro’s gross revenue at Rs 1,786 crore showed an increase of 44 per cent year-on-year and profit after tax of Rs 321 crore, up by 42 per cent from the corresponding quarter of the previous fiscal.
The global IT services division grew by 44 per cent year-on-year to Rs 1,255 crore, with a PBT of Rs 297 crore, an increase of 39 per cent. Operating income to revenue at 24 per cent increased by 2 per cent sequentially but declined by 1 per cent year-on-year. The R&D services contributed 33 per cent of the division’s revenue, enterprise business 56 per cent and IT-enabled services (Wipro Spectramind) 11 per cent.
Vice-chairman Vivek Paul said, “Record volume growth coupled with an improving pricing environment led to the third consecutive quarter of double-digit dollar revenue growth. As a result, we have seen 51 per cent revenue growth for the entire year. For the fourth quarter, our technology business continued to rebound with 15 per cent sequential growth, while our IT business maintained its momentum with 8 per cent.”
Wipro Infotech, which deals with hardware products and services business in India, West Asia and the Asia Pacific, posted a revenue of Rs 976 crore, an increase of 16 per cent year-on-year. Similarly, its profit before tax grew by 42 per cent to Rs 79.2 crore year-on-year.
For the fourth quarter, infotech revenues jumped by 50 per cent from the previous year to Rs 367 crore and profit before tax shot up by 66 per cent to Rs 39.9 crore. This division accounted for 21 per cent of the group’s total revenue and 11 per cent of its profit before tax.
The group’s non-IT firm — consumer care and lighting business — recorded a revenue of Rs 365 crore and profit before tax of Rs 55.1 crore, registering an increase of 22 per cent and 15 per cent, respectively, over the previous year.
The company managed to neutralise the impact of rupee appreciation by timely hedging of dollars in the forex market to the tune of $903 million during the year, Suresh Senapathy, corporate executive president, said. This was possible as the global IT services generated business in dollar terms.