Wipro Meets St Hopes, But Sees Flat Q1 Revenue

Fourth-quarter profit rises 4% sequentially to 1,375 cr as CEO Kurien urges patience

Wipro, India's third-biggest software services exporter, on Wednesday projected tepid growth in first-quarter revenue. The company, which is in the middle of an organisational revamp involving crunching and dismantling of management layers, said first-quarter revenues for the IT business will either fall 0.4% or grow 1.5% over the previous quarter.
"We've made several organisational changes this quarter with the clear objective of trying to simplify the organisation and making us much leaner and faster on our feet. We've moved to a single P&L axis which is that of the industry vertical," Wipro Chairman Azim Premji told a press conference. In January this year, Premji broke the joint-CEO structure and appointed TK Kurien as the new chief executive with the specific mandate to fire up sales and profitability. The Bangalore-based firm had lagged its peers in sales and profit growth for some quarters and was in danger of losing the No.3 spot to rival Cognizant. "While all of us love quarter-toquarter objectives because it keeps you on the treadmill, the reality is that when you are doing the kind of transformation that we are going through, a quarter would be just too short to look at," Kurien said.
Officials said the guidance for first quarter of FY12 was more a reflection of the order pipeline based on decisions taken several quarters earlier.
Unstable Footing for B'lore Biggies
Wipro joins bigger rival Infosys in forecasting tepid sales. Revenue at its software business will range between $1.39 billion and $1.42 billion in the current quarter
Uncertain Future

• WAGE COST: Wipro plans to raise salaries by 12-15%. The wage increases, mirroring hikes planned by TCS and Infosys, will impact operating margins

• BUMPY ROAD: Growth in global technology spending may slow to 5.1% from 5.4% in 2010 because of macroeconomic uncertainty, signalling customers may be hesitant to sign long-term contracts because of these concerns
Currency fluctuations too a big deterrent

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