Wipro Ltd, India's third biggest software services exporter, expects
less volatile global oil prices to revive spending on IT outsourcing by
its energy and utility clients.
Wipro, also listed in the United States, makes about 18 per cent of its
sales from the energy sector, compared to about 5 per cent at bigger
rivals Tata Consultancy Services (TCS) and Infosys.
A drop in crude prices had made many energy sector clients cut back on
spending, prompting Wipro to give a tepid forecast in the past quarter.
Volatility has calmed this week after the price of Brent fell about 12
per cent in July.
"We are not expecting to see a further decline in energy in the second
quarter," chief executive T K Kurien told reporters at a conference. The
company's energy business sales had dropped about a third over the past
year.
For the quarter ended June, Wipro's fiscal first quarter, the company
posted a net profit of Rs 2,190 crore ($343.8 million), broadly in line
with forecasts and posting a growth of 4 per cent over the corresponding
period last year.
Analysts, on an average, expected a profit of Rs 2,183 crore, according to Thomson Reuters data.
The company posted a 10 per cent rise in quarterly revenue, but that was
lower than the 12.4 per cent rise rival Infosys recorded in the
comparable quarter.
Wipro, which makes about three quarters of its sales in the United
States and Europe, said its IT services revenue would be in the range of
$1.82-$1.86 billion in the current quarter, a growth of up to 3.9 per
cent over the preceding quarter.
Dipen Shah, head of private client group research at Kotak Securities,
said the September quarter guidance was "slightly ahead" of
expectations. He said the management's comments about energy sector
sales having bottomed out were also encouraging.
During the quarter ended June, IT services revenues came in at $1.79
billion, rising 1.1 per cent from the January-March period and hitting
the top end of its forecast.
