Bangalore-based Wipro’s third-quarter sales grew 42.9% to $898.6m, with net profit up 39.9% at $168.9m. The company’s global IT services business, which includes its business process outsourcing operation, reported revenue growth of 34.1% to $654.6m.
Wipro is the second largest vendor in the Indian IT services space. The company’s third-quarter growth rate compares favorably with that of larger rival Tata Consultancy Services, which this week posted an increase in sales of 40.8%, but is below the levels enjoyed by third-placed Infosys, which grew sales by 46.9% to $821m.
Wipro’s operating margin fell to 19.4% in the third quarter, down from 21.1% in the same period the previous year. While the company’s BPO services business increased its operating income by 31.8% to $11.9m, the overall operating margin for Wipro’s global IT services operation fell to 23.7% from 24.1% in the third quarter of fiscal 2006.
During the quarter, Wipro’s global services division added 37 new clients, of whom 26 were based in North America. The company is generally secretive in regards to its customers, but it has recently announced contract wins with UK-based broadcaster ITV and Indian financial services company Dena Bank.
A net addition of 4,997 new staff took Wipro’s global services headcount to 66,176, with just under three-quarters employed in the IT services space and the remainder providing BPO services. Wipro also succeeded in reducing its attrition rate to 16% from 18% a year ago, although the level is still higher than that of TCS (10.8%) and Infosys (13.5%).
Like its rivals in the Indian IT services space, Wipro has been looking to expand its European presence over the last 12 months. The company has made two acquisitions as part of this strategy, snapping up Portugal’s Enabler and Finland-based Saraware, but these deals have yet to make an impact in terms of sales. In the third quarter, Wipro generated 33.6% of its revenue in Europe, up 0.6% from the previous year.
