Wipro Records 83% Growth in Net Income; Results for the Quarter Ended June 30, 2004 under US GAAP

Business Wire, July 23, 2004

BANGALORE, India and MOUNTAIN VIEW, Calif. -- Wipro Limited (NYSE:WIT) today announced financial results under US GAAP for its first fiscal quarter ended June 30, 2004.

Highlights for the quarter ended June 30, 2004:

--Net Income was Rs. 3.25 billion ($71 million), representing an increase of 83% over the same period last year

--Revenue was Rs. 17.70 billion ($385 million), representing an increase of 51% year over year

--Global IT Services & Products Revenue was Rs. 13.54 billion ($294 million), representing an increase of 47% over the same period last year

--Global IT Services & Products Earnings Before Interest and Tax (EBIT) was Rs. 3.33 billion ($72 million), representing an increase of 84% over the same period last year

--Rs. 4.40 billion ($96 million) cash generated from continuing operations

--Global IT Services & Products added 35 new clients in the quarter (including 3 in its IT Enabled Services operations).

Outlook for the Quarter ending September 30, 2004

Azim Premji, Chairman of Wipro, commenting on the results said, "Team Wipro delivered yet another quarter of solid performance. As the IT spending environment stabilizes, customers are increasingly demanding integrated services backed by high-quality service delivery. Our early identification of this trend and proactive investments have resulted in record Revenues for us. We shall continue to proactively invest for the future, even as we focus to leverage increasing value from investments made in the past in all our businesses.

"Looking ahead, for the quarter ending September 2004, we expect our Revenue from our Global IT Services business to be approximately $318 million."

Vivek Paul, Vice Chairman, said, "Our Global IT Services business continued to deliver consistent business results. Sequential growth of 8.4% in Revenues and expansion in Operating Margin for the fourth consecutive quarter were primarily the result of sustained volume growth and an improving pricing environment. Growth continued to be broad based -- across domains, service lines and geographies, with Revenues from our European clients recording a 20% sequential growth. With these strong first quarter results, we are confident that we will continue to outperform the industry."

Suresh Senapaty, Corporate Executive Vice President -- Finance, said, "Improvement in Operating Margin in our Global IT Services business was driven by better price realization in Offshore as well as Onsite projects, an increase in the proportion of Revenues from Offshore projects, an increase in IP sales and continued operational improvements."

Wipro Limited

Total Revenues for the quarter ended June 30, 2004 were Rs. 17.70 billion ($385 million), representing a 51% increase over the corresponding period in the previous year. Net Income was Rs. 3.25 billion ($71 million), representing an increase of 83% over the same period last year. Earnings per share was Rs. 4.69 ($0.10) for the quarter ended June 30, 2004, representing an increase of 83% over the earnings per share of Rs. 2.57 (adjusted for the 2:1 stock dividend) for the quarter ended June 30, 2003.

Global IT Services and Products (76% of Revenues and 93% of Operating Income for quarter ended June 30, 2004)

Our Global IT Services and Products business segment recorded Revenue of Rs. 13.19 billion(1) ($287 million) for the quarter ended June 30, 2004, representing an increase of 42% over the same period last year. EBIT was Rs. 3.33 billion ($72 million) for the quarter ended June 30, 2004, representing an increase of 84% over the same period last year. Operating Income to Revenue for the quarter ended June 30, 2004 was 25%, representing an increase of 5% from the quarter ended June 30, 2003. This increase was primarily due to higher price realization driven by productivity improvements, lower Selling, General and Administrative costs and the higher proportion of work carried out offshore. EBIT for the quarter includes acquisition related charges of Rs. 48 million ($1 million), representing 0.4% of the segment Revenue, from the amortization of intangibles.

We had 31,517 employees as of June 30, 2004, which includes 20,768 employees in the IT Services business and 10,749 employees in the IT Enabled services business. This represents a net addition of 3,015 employees comprising the addition of 1,566 people in the IT Services business and 1,449 people in the IT Enabled services business.

During the quarter, we added 35 new customers comprising 13 customers in the R&D Business, 19 customers in the Enterprise Business and 3 new customers in the IT Enabled services business.

India and Asia-Pac IT Services and Products (15% of Revenue and 3% of Operating Income for quarter ended June 30, 2004)

Our India and Asia-Pac Services and Products business segment (Wipro Infotech) recorded Revenue of Rs. 2.54 billion ($55 million) for the quarter ended June 30, 2004, representing an increase of 91% over the quarter ended June 30, 2003. EBIT for the quarter ended June 30, 2004, was Rs. 105 million ($2 million), representing an increase of 64% over the same period last year.