Wipro says market share gains likely in 12-18 months

Wipro , India's No. 3 software services exporter, reported an 18% rise in quarterly net profit, meeting expectations, as customers outsourced more work to the company to cut their operational expenses.

Consolidated net profit rose to Rs 1,580.2 crore for the fiscal first quarter ended June 30 from Rs 1,481 crore a year earlier for Wipro , which counts Citigroup Inc and Cisco systems Inc among its clients.

India's USD 100 billion export-driven outsourcing sector faces diminishing hopes of an early revival in demand as their biggest markets, the United States and Europe, grapple with an uncertain economic and political climate.

We managed to maintain pricing despite tough environment, CFO Suresh Senapaty told CNBC-TV18 in an interview.  

Earlier this month, Infosys Ltd, the no. 2 software exporter, made a bigger-than-expected cut in its revenue growth forecast for the current fiscal year. But sector leader Tata Consultancy Services Ltd beat expectations with a 38% rise in quarterly net profit.
 
Wipro managed a constant currency dollar revenue growth at 0.3% quarter-on-quarter, inline with their guidance. The first quarter cross currency impact stood at USD 25 million.  

The IT major said its top five clients grew by around 5% sequentially. "Our focus was on client mining," TK Kurien, CEO (IT business) & Executive Director says adding, "market share gains likely in 12-18 months."

Wipro added one USD 100 million client in Q1 and has a total of eight such clients now. "The retail banking division is showing good growth but we have seen some pricing decline in investment banking," the management told the channel.

Delayed projects and overall slump in the IT services segment are forcing tech majors to push back joining dates of freshers. IT majors such as Infosys and Mahindra Satyam are all grappling with their existing bench before they can accommodate fresh recruits.

However, Wipro says it is not looking to cut back on hiring to protect margins. "We expect margins to hover in a narrow band," the company officials say.

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