Wipro Ltd, India’s third largest IT service provider, posted a 24 percent rise in net profit in the quarter ending September 30, benefiting from a boost in outsourcing orders.
Wipro’s second-quarter net profit rose to 16.11 billion rupees, compared to the 13.01-billion rupees profit a year ago. The analysts had expected the company to report a net profit of 15.37 billion rupees.
The sales grew 17 percent annually to 106.20 billion rupees and the company forecast its third year revenues to be in the range of $1.56-$1.59 billion, in line with analysts' expectations of 1-4 percent growth.
The Bangalore-based IT firm took a slew of measures this year to boost the margins and improve business in highly competitive environment.
Wipro announced Thursday that it would bring all its non-IT services, including consumer care and medical diagnostics, into a new firm to focus on outsourcing, which accounted for 86 percent of its revenue in the fiscal year ending March 31, Reuters reported.
The increase in outsourcing orders from the foreign clients, who are looking to cut down the expenditure due to the economic slowdown, has benefited the company. The company said that a business restructuring carried out at the outsourcing division in 2011 had started to pay off and the company expected an improvement of 1.3 percent to 3.2 percent in its outsourcing revenue, a Wall Street Journal report said.
The company, also listed on the New York Stock Exchange, gets half of its IT business revenue from the U.S.
The better-than-expected results pushed the company’s shares up over three percent in the Friday morning trading. The company shares were trading at Rs. 364.95 on the BSE at 3.50 pm local time.