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India Wipro: wages to hit margins, no U.S. slowdown
January 18, 2008 / 4:05 AM / in 10 years

India Wipro: wages to hit margins, no U.S. slowdown

BANGALORE, Jan 18 (Reuters) - Wipro Ltd (WIPR.BO), India’s No. 3 software services exporter, expects wage increases to hit its operating margin in the current quarter, and does not see signs of a U.S. slowdown, its chief financial officer said Friday.

New York-listed Wipro (WIT.N), earlier said profit for the fiscal third quarter ended Dec. 31 rose 11 percent, lagging forecasts, as wage increases pinched margins.

Operating margins for the March quarter were likely to take a hit of 1 percent from higher wages, Suresh Senapaty told Reuters, adding the company would be able to neutralise the impact through various measures.

When asked if they were seeing signs of a U.S. slowdown, Senapaty said: “We haven’t seen that.”

“And we think it’s going to be an opportunity for us ... we will continue to grow in the U.S. and Europe.”

Wipro, which counts telecoms gear makers Cisco (CSCO.O) and Nortel NT.N among key clients, said net profit rose to 8.26 billion rupees ($210 million) in the quarter ended Dec. 31 under U.S. accounting standards, up from 7.45 billion a year earlier.

A Reuters poll had forecast a net profit of 8.65 billion rupees for Wipro, which provides IT solutions and services such as system integration, software application development and maintenance and research services. ($1=39.3 rupees) (Reporting by Sumeet Chatterjee; Editing by John Mair)

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