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Wipro sees strong sales growth, eyes Europe deals

Bangalore-based Wipro, which inked a 10-year deal to manage IT outsourcing for Canadian energy and utilities firm Atco on Friday, said it expected IT services sales in this quarter to grow between 1.7 and 4 per cent from the quarter ended June.

Lehar Maan and Sruthi Ramakrishnan    Bangalore     Last Updated: July 24, 2014  | 22:09 IST
Wipro sees strong sales growth, eyes Europe deals

Wipro Ltd, India's third-biggest software services exporter , forecast strong revenue growth on the back of higher outsourcing spending by overseas clients and said it was focusing on winning more deals in Europe.

Bangalore-based Wipro, which inked a 10-year deal to manage IT outsourcing for Canadian energy and utilities firm Atco on Friday, said it expected IT services sales in this quarter to grow between 1.7 and 4 per cent from the quarter ended June.

IT services revenue in Wipro's fiscal first quarter that ended on June 30 rose 1.2 per cent from the previous quarter to $1.7 billion, as it added 35 new clients.

Consolidated net profit for the quarter grew 29.6 per cent from a year earlier to Rs 2,103 crore ($349.9 million), slightly below consensus estimates of Rs 2,124 crore.

Total revenue rose 14 per cent from a year earlier to Rs 11,140 crore.

Wipro is part of the $108 billion-a-year Indian outsourcing sector that generates about 90 per cent of its revenue from providing services such as IT network installation and the development of software applications for overseas clients that are looking to raise spending on technology.

Wipro, whose chairman is billionaire Azim Premji, got nearly half of its IT services revenue in the June quarter from the Americas, its biggest export market, and about 30 per cent from Europe.

"Europe market is hot, so we are focussed on making sure we have our fair share of wins there," Chief Executive Officer TK Kurien told reporters at a news conference after the results.

"All we can say (is the) second half of the year will hopefully be better for us than the first half of the year," he said about overall growth in the fiscal year that started on April 1.

Sarabjit Kour Nangra, a sector analyst at Mumbai brokerage Angel Broking, said Wipro's revenue guidance was "pretty strong".

"It's an indication that the momentum is building and subsequent quarters will be better," Nangra said.

Wipro's bigger Indian rivals Tata Consultancy Services Ltd and Infosys Ltd said this month they are boosting investment in new technologies.

Wipro shares ended up 1 per cent at 576.85 rupees ahead of the announcement, while the main Mumbai market index. NSEI closed 0.5 per cent higher. The stock is up 3.2 per cent so far this year, lagging a 24 per cent rise in the broader market.

($1 = 60.1100 Indian Rupees)

(Additional reporting by Nivedita Bhattacharjee)
 
(Reuters)

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