IT Majors Ride Global Revival, Forecast Better FY15 Wipro Q4 profit up 14% at $371m

Bangalore: Wipro's guidance for the first quarter of fiscal 2015 is likely to disappoint stakeholders, but the company said the quarter was likely to be an exception and the full year looked good based on the order book position.      India's third-largest IT company has projected sequential revenue growth between -0.3% and 2% for the ongoing June quarter. That's a step-down from the past three quarters when revenue grew sequentially by 2.5% to 3%.      Wipro CEO T K Kurien, however, said the Q1 guidance should not be read as a precursor to the full year. "Wipro's Q1 is traditionally a lean one. Our order-book in the last quarter saw a significant increase and is one of the highest ever, and that momentum is continuing into the current quarter. Our win rates in contracts have increased by 50% from where we were some time ago. You will see growth come back in Q2," he said.      Kurien said revenues from Indian government projects, which is relatively significant for Wipro, peaks in Q4 and drops to a low in Q1, impacting sequential growth in Q1. "Our forecast this year for Q1 at the lower end is up 8% compared to Q1 of last year," he said. Considering that the full year growth last year was 6.4%, the company's commentary indicates a significant improvement the ongoing year.      In the just concluded quarter, the company's revenue grew sequentially by 2.5% to $1,720 million, which was within its guidance of 2% to 4%, but closer to the lower end. Net profit, however, increased sharply by 14% sequentially to $371 million, and operating margin rose 150 basis points to 24.5% — the highest in three years.      Company CFO Suresh Senapaty said three factors contributed roughly equally to the margin increase — currency changes, employee utilization increase, and a mix of automation, use of more tools and higher throughput.      For the full year (2013-14), IT services revenue was up 6.4% at $6.6 billion. That's just about half of the industry growth rate of 13%. The company has done some major restructuring to get back to industry average rates, including sharpening its sales team and creating new divisions to address emerging areas like digital, cloud, mobility and analytics. "There is no issue of demand in US or Europe. We have to go out there and win orders and ensure we execute well," Kurien said.