UPDATE 2-India's Wipro sees strong sales growth, eyes Europe deals

Thu Jul 24, 2014 10:46am EDT

* Q1 net profit 21.03 bln rupees vs 21.24 bln forecast

* Sees Q2 IT services revenue up 1.7-4 pct from June quarter

* CEO expects second half of fiscal year to be better than H1 (Adds management, analyst comments)

By Lehar Maan and Sruthi Ramakrishnan

BANGALORE, July 24 (Reuters) - Wipro Ltd, India's third-biggest software services exporter, forecast strong revenue growth on the back of higher outsourcing spending by overseas clients and said it was focussing on winning more deals in Europe.

Bangalore-based Wipro, which inked a 10-year deal to manage IT outsourcing for Canadian energy and utilities firm Atco on Friday, said it expected IT services sales in this quarter to grow between 1.7 and 4 percent from the quarter ended June.

IT services revenue in Wipro's fiscal first quarter that ended on June 30 rose 1.2 percent from the previous quarter to $1.7 billion, as it added 35 new clients.

Consolidated net profit for the quarter grew 29.6 percent from a year earlier to 21.03 billion rupees ($349.9 million), slightly below consensus estimates of 21.24 billion rupees.

Total revenue rose 14 percent from a year earlier to 111.4 billion rupees.

Wipro is part of the $108 billion-a-year Indian outsourcing sector that generates about 90 percent of its revenue from providing services such as IT network installation and the development of software applications for overseas clients that are looking to raise spending on technology.

Wipro, whose chairman is billionaire Azim Premji, got nearly half of its IT services revenue in the June quarter from the Americas, its biggest export market, and about 30 percent from Europe.

"Europe market is hot, so we are focussed on making sure we have our fair share of wins there," Chief Executive Officer T.K. Kurien told reporters at a news conference after the results.

"All we can say (is the) second half of the year will hopefully be better for us than the first half of the year," he said about overall growth in the fiscal year that started on April 1.

Sarabjit Kour Nangra, a sector analyst at Mumbai brokerage Angel Broking, said Wipro's revenue guidance was "pretty strong".

"It's an indication that the momentum is building and subsequent quarters will be better," Nangra said.

Wipro's bigger Indian rivals Tata Consultancy Services Ltd and Infosys Ltd said this month they are boosting investment in new technologies.

Wipro shares ended up 1 percent at 576.85 rupees ahead of the announcement, while the main Mumbai market index closed 0.5 percent higher. The stock is up 3.2 percent so far this year, lagging a 24 percent rise in the broader market. ($1 = 60.1100 Indian Rupees) (Additional reporting by Nivedita Bhattacharjee in MUMBAI; Writing by Devidutta Tripathy; Editing by Miral Fahmy and David Clarke)


After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.