Wipro Records 67% Growth in Net Income; Results for the Quarter Ended September 30, 2004 under US GAAP

Business Wire, Oct 15, 2004

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

Highlights for the quarter ended September 30, 2004:

--Net Income was Rs. 3.8 billion ($84 million), representing an increase of 67% over the same period last year

--Revenue was Rs. 19.8 billion ($431 million), representing an increase of 47% year over year

--Global IT Services & Products Segment Revenue was Rs. 15.0 billion ($326 million), representing an increase of 45% over the same period last year

--Global IT Services & Products Earnings Before Interest and Tax (EBIT) was Rs. 4.0 billion ($88 million), representing an increase of 90% over the same period last year

--Rs. 4.8 billion ($105 million) cash generated from continuing operations

--Global IT Services & Products added 34 new clients in the quarter (including 3 in its IT Enabled Services operations)

--Wipro's India, Middle East & Asia Pac IT business segment signed a five year AUD 17 million contract with AXA Australia to provide Application Maintenance and Development Services to support their Wealth Management and Financial Protection products.

Outlook for the Quarter ending December 31, 2004

Azim Premji, Chairman of Wipro commenting on the results said, "The strong results clearly demonstrate that Wipro is winning in a market where customers are seeking higher value. Our Global IT Services business delivered strong sequential Revenue growth of 13% and improved Operating Margins for the fifth successive quarter. We continue to benefit from the investments made over the last few years. We have good business momentum across our businesses. Coupled with our compelling portfolio of services, this gives us immense confidence on our long term prospects. Looking ahead, for the quarter ending December 2004, we expect our Revenue from our Global IT services business to be approximately $347 million."

Vivek Paul, Vice Chairman, said, "We continue to sustain our growth across all our key verticals and service lines in our Global IT business. Good volume growth and stable pricing environment resulted in Revenues of $327 million, ahead of our guidance of $318 million. Excellent execution and continuing focus on improving productivity helped deliver Operating Margin expansion. In terms of service lines, after a couple of subdued quarters, our Business Process Outsourcing business rebounded strongly with a sequential revenue growth of nearly 20%."

Suresh Senapaty, Corporate Executive Vice President - Finance said, "Improvement in Operating Margin in our Global IT Services business was driven by better price realization for Onsite projects, an increase in the proportion of Revenues from Offshore projects, and continued operational improvements partially offset by lower utilization primarily due to a net addition of over 5,500 employees to our team, including around 3,300 in our IT Services business. Further, in a move that could significantly improve employee retention and enhance the alignment of employee interests with those of shareholders, we have issued Restricted Stock Units to our key employees."

Wipro Limited

Total Revenues for the quarter ended September 30, 2004 were Rs. 19.8 billion ($431 million), representing a 47% increase over the corresponding period in the previous year. Net Income was Rs. 3.8 billion ($84 million), representing an increase of 67% over the same period last year. Earnings per share was Rs. 5.52 ($0.12) for the quarter ended September 30, 2004, representing an increase of 67% over the earnings per share of Rs. 3.31 (adjusted for the 2:1 stock dividend) for the quarter ended September 30, 2003.

Total Revenues for the six months ended September 30, 2004 were Rs. 37.5 billion ($817 million), representing a 49% increase over the corresponding period in the last year. Net Income for the six months ended September 30, 2004 was Rs. 7.1 billion ($154 million), representing an increase of 74% over net income for the same period last year. Earnings Per Share was Rs. 10.21 ($0.22) for the six months ended September 30, 2004, representing an increase of 74% over the earnings per share (adjusted for 2:1 stock dividend) of Rs. 5.87, for the corresponding period last year.

Global IT Services and Products (75% of Revenues and 88% of Operating Income for quarter ended September 30, 2004)

Our Global IT Services and Products business segment recorded Revenue of Rs. 15.0 billion(1) ($326 million) for the quarter ended September 30, 2004, representing an increase of 45% over the same period last year. EBIT was Rs. 4.0 billion ($88 million) for the quarter ended September 30, 2004, representing an increase of 90% over the same period last year. Operating Income to Revenue for the quarter ended September 30, 2004 was 27%, representing an increase of 7% from the quarter ended September 30, 2003. This increase was primarily due to higher price realization driven by productivity improvements, lower proportion of Selling, General and Administrative costs and the higher proportion of work carried out Offshore. EBIT for the quarter includes acquisition related charges of Rs. 50 million ($1 million), representing 0.3% of the segment Revenue, from the amortization of intangibles.