Wipro's numbers for Q3 came as a disappointment to the market and early trades on Friday reflected this, the scrip shedding 4% to Rs 1,516.
Even so, the scrip of India's No. 1 IT company, was traded quite well as volumes crossed 222,000 shares on BSE by 10:15 IST. There was much anticipation earlier that results would prove satisfying and Wipro had gained 5.48% to Rs 1,579.20 from Rs 1,497.10 between 13 January and 16 January 2003 .
According to US GAAP, Wipro has experienced a 3.75% decline in Q3 ended 31 December 2002 net profit to Rs 218.1 crore (Rs 2.18 billion), below market expectations. It announced its quarterly performance on Friday morning before market hours.
In the corresponding period of the previous year, net profit was Rs 226.6 crore (Rs 2.26 billion). Revenues increased from Rs 860.2 crore (Rs 8.6 billion) in DQ2001 to Rs 1,087.1 crore (Rs 10.87 billion) in DQ2002.
A capitalmarket.com poll of six software analysts had estimated net profit at Rs 232 to Rs 264.5 crore (Rs 2.32 billion to Rs 2.64 billion) for the quarter ended 31 December 2002. Sales were projected at between Rs 1,061 crore (Rs 10.61 billion) and Rs 1,140.5 crore (Rs 11.40 billion) for the quarter.
Meanwhile, Wipro met its revenue guidance for the global IT services business, but fell short of its revenues guidance for Spectramind (IT-enabled services business). For the quarter ended 31 December 2002, Wipro had projected revenues from global IT services at approcimately $152 million, which it surpassed by posting $154 million. Wipro Spectramind was projected to have revenues of approximately $12.5 million. The company turned out $11.83 million.
Software analysts say the global IT services performance has been satisfying, while the revenues from the IT-enabled services prove disappointing. Overall the results are held to be modest. Yet, the scrip has fallen as the market was expecting something better. Players, who had built positions ahead of the results, are now selling the Wipro stock.
For the quarter ended 31 December 2002, the company has completed the acquisition of the remaining outstanding shares of Wipro Spectramind Services. It also closed the acquisition of the Global Energy practice of AMS, Inc. The financial results from this practice will be consolidated in the quarter ending 31 March 2003. The company has entered into definitive agreements to purchase the assets related to the two research & development centres of Ericsson India at Bangalore and Hyderabad and the research & development centre of EHPT India at Delhi.
Employment offers were made to 291 persons currently employed in these three centers. The transaction is expected to close in January 2003. Concurrently, Ericsson AB has signed an agreement for purchase of consultancy services from Wipro for an amount of $17 million up to calendar year 2004.
Wipro also acquired a 40% equity share of Wipro Healthcare Information Technologies (formerly GE Medical Systems Information Technologies Ltd.) held by Citadel Healthcare for Rs 97 million ($2 million). Upon closing, Wipro Healthcare Information Technologies Ltd. will be a wholly-owned subsidiary.
For the quarter, the company has added 24 customers and 1,526 employees .
Meanwhile, for the current quarter ending 31 March 2003, Wipro has projected revenues in the global IT services business at $ 162 million, in Wipro Spectramind at $ 12 million and in the healthcare and life science business at $ 2.5 million.
As on 30 September 2002, the promoters held 84% equity stake in Wipro, while the public and institutions held 7.8% and 1.4%, respectively.