Wipro’s IT Business crosses $3 billion in FY 06-07, Net Income grows 42% in FY06-07

Bangalore, April 20, 2007 - Wipro Limited (NYSE: WIT) today announced its results approved by the Board of Directors for the quarter and year ended March 31, 2007.

Highlights
Results for the year ended March 31, 2007

• Wipro Limited Revenue increased by 41% to Rs. 150 billion (Rs. 15,000 Crores)
• Profit After Tax (PAT) grew by 42% to Rs. 29.42 billion (Rs. 2,942 Crores)
• Revenues of our combined IT Businesses crossed landmark of $3 billion in annual Revenue
• Revenue of Wipro’s Global IT Business crossed Rs. 100 billion mark and grew 38% to Rs. 110.95 billion (Rs. 11,095 Crores); Profit Before Interest & Tax (PBIT) grew by 36% to Rs. 26.94 billion (Rs. 2,694 Crores)
• Enterprise Solutions Business in Global IT Services segment crossed landmark of $1 billion of annual Revenue and Finance Solutions Business crossed $500 million of annual Revenue
• Revenue from our India, Middle East and Asia Pacific business crossed $500 million and grew by 46% to Rs. 24.84 billion (Rs. 2,484 Crores); PBIT grew by 47% to Rs. 2.14 billion (Rs. 214 Crores)
• Board of Directors recommend a final cash dividend of Rs. 1 per share/ADS, subject to shareholder approval in the Annual General Meeting scheduled in July 2007. This, coupled with interim dividend of Rs. 5 per share, will take total dividend to 300% at Rs. 6 per share

Results for the Quarter ended March 31, 2007

• Wipro Limited’s Sales & Other Income during the quarter crossed the milestone of $1 billion
• Wipro Limited Revenue increased by 39% year on year (yoy) to Rs. 43.33 billion (Rs. 4,333 Crores); PAT grew by 39% yoy to Rs. 8.56 billion (Rs. 856 Crores)
• Global IT Services & Products Revenue was Rs. 30.48 billion (Rs. 3,048 Crores) reflecting an increase of 32% yoy; PBIT was Rs. 7.32 billion (Rs. 732 Crores) reflecting a growth of 26%
• Global IT Services & Products added 44 new clients in the quarter
• Wipro’s India, Middle East & Asia Pac business records 38% yoy growth in Revenues to Rs. 7.84 billion (Rs. 784 Crores); PBIT grew 29% to Rs. 0.73 billion (Rs. 73 Crores)

Performance for the Year ended March 31, 2007 and Outlook for the Quarter ending June 30, 2007
Azim Premji, Chairman of Wipro, commenting on the results said "All our business segments contributed to the strong growth in Revenues and Profits during FY2006-07. During the year, we completed strategic acquisitions, expanded local sales foot-print, built deeper domain skills and sharpened our account management focus. We enhanced our Global Delivery capabilities through centres in Romania, Brazil and Portugal. Encouraged by our early success, we launched more projects under the Quantum Innovation Umbrella that are focused on creating non-linear growth opportunities, superior delivery structures and new business opportunities. Our Indian IT Services & Products Business, Our Consumer Care & Lighting Business and our Infrastructure Engineering Business also delivered industry leading growth rates. Given the exciting prospects in all our business segments, we look forward to 2007-08 and beyond with excitement. Looking ahead, for the quarter ending June 2007, we expect our Revenue from our Global IT services business to be approximately $711 million."

Suresh Senapaty, Chief Financial Officer, said "During the quarter ended March 2007, we delivered Revenues of $690.7 million ahead of our guidance of $685 million. We continue to see robust growth momentum in our differentiated Services - Business Process Outsourcing (BPO), Enterprise Application Services and Technology Infrastructure Services. Increase in billing rates and improved profitability in our acquisitions and BPO significantly offset adverse impacts of Onsite wage hikes and exchange rate movement on profitability. Operating Margins of our acquisitions portfolio improved by more than 900 basis points sequentially. We are happy to share that all our acquisitions have reported profits for the quarter ended March 31, 2007. For the full year FY07, we have delivered a margin of 24.3% in our Global IT business, in a narrow range of that of FY05-06, despite significant investments in acquisitions and sales & marketing."

Wipro Limited
Revenues for the year ended March 31, 2007, were Rs. 150 billion, representing a 41% increase yoy. Profit after Tax for the year was Rs. 29.42 billion, an increase of 42% yoy. Revenues for the quarter ended March 31, 2007, were Rs.43.33 billion and Profit after Tax was Rs. 8.56 billion.

Global IT Services and Products
Global IT Services & Products reported Revenues of Rs. 110.95 billion for the year ended March 31, 2007, representing an increase of 38% yoy and PBIT of Rs. 26.94 billion, an increase of 36% yoy. Operating Income to Revenue for the year was 24.3%.

For the quarter ended March 31, 2007, Global IT Services & Products grew its Revenue to Rs. 30.48 billion and PBIT increased to Rs. 7.32 billion. Operating Income to Revenue was 24.0%. Technology Business contributed 30% of the Revenues of Global IT Services, Enterprise Business contributed 61% of Revenues and the balance 9% was contributed by BPO Services.

We had 67,818 employees as of March 31, 2007, which includes 50,354 employees in our IT Services business and 17,464 employees in our BPO business. This represents a net addition of 14,076 people comprised of 12,699 in our IT Services business and 1,377 people in our BPO business for the year.

During this quarter, Wipro Technologies launched a multi-media campaign around the theme of "Applied Innovation". Applied Innovation is the ability to infuse newer ideas and newer ways of doing things into all parts of the organization, and improve business outcomes, often without major or disruptive change. It is a 360 degree business approach covering process, delivery, business and technology innovations that help Wipro to work collaboratively with clients for cost take-outs, speed to market and new business opportunities. This is expected to evolve into a global branding campaign in the coming fiscal.

New Business
Wipro added 44 new clients this quarter. Some of the major engagements we won include a multi-million dollar Managed Infrastructure Services contract from a global leader in semiconductor manufacturing, a large ORACLE CRM engagement from a Telecom major and an Enterprise Test Management contract for testing the Retail Banking applications from a leading bank in North America. We also won a BPO contract from a large, global Airline company. There has also been a significant traction in the retail space with 4 new clients being added including one of the Top ten global retailers.

Innovation:
Wipro filed for 13 patents during the financial year and also filed more than 15 invention disclosures on behalf of its clients in the area of R&D services. Wipro BPO continues to grow strongly and this quarter saw the launch of its ‘Platform BPO’ solution during the recent Gartner Outsourcing Summit. Platform BPO helps enterprises increase business performance, optimize processes and enables end to end function outsourcing. We expect the Platform BPO approach to be a key differentiator for Wipro’s BPO offering.

Awards and Recognition:
During the quarter Wipro won IQPC’s 2007 Global Excellence Awards including the best Global F&A Excellence Award and the Global BPO Industry Leader award. Wipro also won the Dale Carnegie ‘Global Leadership Award’ and topped the Most Admired Knowledge Enterprises (MAKE) Asia rankings. Global IT Services and Products accounted for 70% of the Revenue and 87% of the PBIT for the quarter ended March 31, 2007.

Source : Equity Bulls

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