Results Prepared in Accordance With US GAAP; Wipro Records 22% Net Income Growth for the Quarter Ended December 31, 2001

Business Wire, Jan 18, 2002

Business/Technology Editors

LONDON--(BUSINESS WIRE)--Jan. 18, 2002

Wipro Limited (NYSE:WIT) today announced financial results under US GAAP for its third fiscal quarter ended December 31, 2001.

Highlights:

- Net Income for the quarter ended December 31, 2001, was Rs. 2.24 billion ($46
million) representing an increase of 22% over the same period last year. Net
Income for the nine months ended December 31, 2001 was Rs. 6.24 billion ($129
million) representing an increase of 45% over the same period last year.

- Global IT Services segment Revenue increased 6% over the prior quarter, and
increased 25%, at Rs. 6.08 billion ($126 million), compared to the quarter
ended December 31, 2000. Increases in Offshore realization by 2.3% and Onsite
realization by 1.5% over the same period last year.

- R&D Services contributed 51% of Global IT Services Revenue for the quarter
ended December 31, 2001, representing an increase of 1%, from 50% over the
corresponding period last year.

- Rs. 2.00 billion ($44 million) of cash was generated from operations for the
quarter ended December 31, 2001, and Rs. 7.80 billion ($162 million) of cash
was generated for the nine months ended December 31, 2001.

- 27 new clients added in the quarter ended December 31, 2001, including 6
Fortune 1000 companies. 4 new client dedicated development centers in India
started during the quarter ended December 31, 2001.

Total Revenues for the nine months ended December 31, 2001, were Rs. 24.81 billion ($514 million), representing a 15% increase over the corresponding period in the last year. Net Income was Rs. 6.24 billion ($129 million), representing an increase of 45% over Net Income for the same period last year. Earnings Per Share from continuing operations was Rs. 27.00 ($0.56) for the nine months ended December 31, 2001, representing an increase of 41% over the Earnings Per Share of Rs. 19.12, for the corresponding period last year. Total Revenue for the quarter ended December 31, 2001, was Rs. 8.68 billion ($180 million), representing a 14% increase over the corresponding period in the last year. Net Income was Rs. 2.24 billion ($46 million), representing an increase of 22% over Net Income for the same period last year. Earnings Per Share from continuing operations was Rs. 9.70 ($0.20) for the quarter ended December 31, 2001, representing an increase of 21% over the Earnings Per Share of Rs. 8.01, for the corresponding period last year.

Commenting on the results, Mr. Azim Premji, Chairman of Wipro, said, "We achieved a significant milestone this quarter in our journey towards our Vision 2004 by consolidating our Quality leadership position in the global Software Services market. We were the first company in the world to be certified at Level 5 of the People Capability Maturity Model (PCMM) and the first Software Service provider to be certified under TL 9000, reflecting the commitment of Wiproites to Quality.

"Our results for the quarter were in line with our expectations in an environment of enhanced economic turbulence. We believe we have grown ahead of the industry growth rate for the nine month period ended December 2001. For the quarter ending March 2002, we expect revenue from our Global IT business to be around US$120 million."

Mr. Vivek Paul, Vice Chairman and CEO of Wipro Technologies added "We have seen all round sequential growth across verticals, except in Telecom and Internetworking. The sequential growth in Financial Services of 19% and Enterprise Application Services of 41% contributed to an 8% sequential growth in Enterprise Business. In the R&D Services segment, Embedded Systems grew by 6% sequentially and Telecom and Internet Service Providers grew by 54% sequentially. Despite an environment of severe price pressure, we were able to grow our realisation by continuing to grow the mix of high value-add services."

Global IT Services (70% of Revenues and 97% of Operating Income for the quarter ended December 31, 2001)

Wipro's Global IT Services business segment recorded Revenue of Rs. 6.08 billion ($126 million) for the quarter ended December 31, 2001, representing an increase of 25% over the Revenue for the quarter ended December 31, 2000. Earnings before Interest and Tax (EBIT) were Rs. 2.05 billion ($43 million) for the quarter ended December 31, 2001, representing an increase of 25% over EBIT for the quarter ended December 31, 2000.

EBIT increased from 33.7% for the quarter ended December 31, 2000, to 33.8% for the quarter ended December 31, 2001. The increase in EBIT resulted from an increase in price realisations of 16% for Offshore projects and an increase of 15% for Onsite projects, over the corresponding period of the previous year, which was partially offset by lower margins on product revenues and a 4% decrease in IT professional utilization as compared to the quarter ended December 31, 2000. EBIT for the nine-month period ended December 31, 2001 increased to 34.1% from 32.8% for the corresponding period in the previous year.

Our largest customer, top 5 and top 10 customers accounted for 15%, 34% and 46%, respectively, of our total Revenue for the quarter ended December 31, 2001, as compared to 8%, 29% and 44% respectively, for the corresponding period of the previous year. Twenty-seven new clients were added in the quarter ended December 31, 2001, of which 6 customers are represented on the Fortune 1000 companies list. New customers added in current fiscal year contributed 24% of total Revenue for the quarter ended December 31, 2001.