The Hindu Business Line : Wipro Q4 net up 35%; announces 1:1 bonus

SOAP-TO-SOFTWARE maker Wipro Ltd sprang a surprise on Friday by announcing a bonus share for every one held and recommended a dividend of Rs 5 a share (250 per cent on par value), despite a bottomline growth that fell short of market expectations.

Wipro's fourth quarter net profits grew 35 per cent to Rs 433 crore on revenues of Rs 2,312 crore compared with net profits of Rs 320 crore on revenues of Rs 1,786 crore in the corresponding period last year. On a sequential basis, Wipro's fourth-quarter revenues and profits grew by 10 per cent and 1 per cent, respectively.

For fiscal 2005, net profits rose 58 per cent to Rs 1,628.5 crore (Rs 1,031.5 crore) on revenues of Rs 8,169 crore (Rs 5,881.2 crore). Tracking the bonus and dividend announcement despite moderate results, the Wipro stock climbed 6.3 per cent to close at Rs 644.45 on the BSE. "Growth was broad-based in terms of verticals, service lines and geographies," said the Wipro Chairman, Mr Azim Premji. "Prospects for 2005-06 are exciting," he said, adding that the company expects revenue from global IT service business to be around $395 million for the first quarter of fiscal 2006, a growth of 5 per cent.

Revenues from the global IT business for the fourth quarter of 2005 stood at $375 million, ahead of the company's guidance of $370 million. High volumes drove the growth in revenues as the company moved more work offshore despite a fall in realisations. Wipro's offshore and onsite volumes grew by 9.1 per cent and 7.3 per cent respectively during the quarter. Wipro added 41 new customers during the quarter.

Mr Suresh Senapaty, Corporate Executive Vice-President (Finance), said the company managed to offset pressure on operating margins due to currency appreciation and a decrease in price realisation through improved utilisation, increased proportion of offshore projects and operational improvements. Wipro improved its operating margins to 26 per cent, up from 22 per cent in fiscal 2004. It added 6,982 employees during the year to take its IT services headcount to 26,184.

Wipro Infotech recorded revenue of Rs 1,396 crore, a year-on-year growth of 43 per cent, and accounted for 21 per cent of total revenues.

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