India's third largest outsourcer Wipro reported a 32 percent increase in revenue
in the quarter ending December 31, but profits grew by only 11 percent over
the same quarter last year, reflecting higher salaries in India, and reduced
margins as a result of its acquisition last year of U.S. IT services provider,
Infocrossing.

Infocrossing's margins were lower than that of Wipro even before the acquisition,
although the company said last year that it hoped to increase utilization at
its data centers by offering the option of hosting in the U.S. to some of its
outsourcing clients.

Wipro's revenue for the quarter was 52.36 billion rupees (US$1.33 billion)
at the exchange rate on the closing date of the quarter, while its profits were
8.26 billion rupees. Wipro's revenue from its export business, Global IT Services
and Products, was 36.14 billion rupees, up by 26 percent over the same period
last year.

The U.S. economy, which is the largest market for Indian outsourcers, is facing
challenges, but there has not been any impact yet on Wipro, Azim Premji, chairman
of the company told analysts.

Indian largest outsourcer, Tata Consultancy Services, and second largest outsourcer,
Infosys Technologies, both reported strong revenue growth for the quarter, despite
concerns that the Indian outsourcing industry was likely to be hit by the weakening
of the U.S. dollar. The U.S. is the largest market for Indian outsourcers, accounting
for about 66 percent of export revenue, and the rupee has appreciated by about
12 percent against the dollar from the beginning of this year.

The appreciation of the rupee against the U.S. dollar pushes down rupee realizations
for revenue earned in the U.S. by Indian companies, even as staff costs in India
are going up.

Wipro got better prices for its services during the quarter, and added 39 new
clients, which helped push up its top line. Improved price realizations and
productivity also helped counter the impact of the weakening dollar, said Suresh
Senapaty, Wipro's chief financial officer. "We have a healthy pipeline
of large deals going forward," Premji said.

The company had 79,832 employees as of December 31, which included 59,925 employees
in its IT Services and products business and 19,907 employees in its BPO (business
process outsourcing) services business.

IDG News Service

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