Wipro Records 31% Growth in Net Income; Results for the Quarter Ended June 30, 2005 Under US GAAP

Business Wire, July 22, 2005

BANGALORE, India & MOUNTAIN VIEW, Calif. -- Wipro Limited (NYSE:WIT) today announced financial results under US GAAP for its first fiscal quarter ended June 30, 2005.

Highlights:

Results for the quarter ended June 30, 2005

--Net Income grew by 31% over the corresponding period in the previous year to Rs. 4.3 billion ($98.1 million)

--Revenue increased by 29% over the corresponding period in the previous year to Rs. 22.9 billion ($525.5 million)

--Global IT Services & Products segment Revenue was Rs. 17.3 billion ($397.3 million), representing an increase of 31% over the corresponding period in the previous year contributed by volume growth and improvement in price realization

--Global IT Services & Products Earnings before Interest and Tax (EBIT) was Rs. 4.1 billion ($93.5 million)

--Global IT Services & Products added 29 new clients in the quarter

--The India, Middle East and Asia Pac Business Unit recorded 146% growth in EBIT over the corresponding period in the previous year; and Revenue grew by 34%

Outlook for the Quarter ending September 30, 2005

Azim Premji, Chairman of Wipro, commenting on the results said, "The strength of our business model and our ability to execute well was once again evident in the robust results of all our businesses. Our Global IT business continued to sustain momentum. IT Services component of the business witnessed strong volume growth & improved price realizations during the quarter. Our unique strengths in the Technology and Enterprise domains coupled with leadership in differentiated services puts us in a strong position to lead industry growth. Looking ahead, for the quarter ending September 2005, we expect our Revenue from our Global IT services business to be approximately $422 million."

Suresh Senapaty, Chief Financial Officer, said, "Our Revenues in Global IT business for the quarter were $398.5 million, ahead of our guidance of $395 million. We saw double digit sequential growth in our Finance Solutions business. Our differentiated Services -- Testing and Technology Infrastructure Services -- continued to grow ahead of our overall growth rates, while our Enterprise Application Services bounced back with robust sequential growth. In terms of geographies, Europe continues to lead the growth. Operationally, we improved price realization & Offshore mix. Operating Margins were impacted by increased visa costs, currency appreciation and higher investments in Sales & Marketing."

Wipro Limited

Total Revenues for the quarter ended June 30, 2005 were Rs. 22.9 billion ($525.5 million), representing a 29% increase over the corresponding period in the previous year. Net Income was Rs. 4.3 billion ($98.1 million), representing an increase of 31% over the same period last year. Earnings per share was Rs. 6.10 ($0.14) for the quarter ended June 30, 2005, representing an increase of 30% over the earnings per share of Rs. 4.69 for the quarter ended June 30, 2004.

Global IT Services & Products (76% of Revenues and 89% of Operating Income for quarter ended June 30, 2005)

Our Global IT Services & Products business segment recorded Revenue of Rs. 17.3 billion(1) ($397.3 million) for the quarter ended June 30, 2005, representing an increase of 31% over the same period last year. EBIT was Rs. 4.1 billion ($93.5 million) for the quarter ended June 30, 2005, representing an increase of 22% over the same period last year. Operating Income to Revenue for the quarter ended June 30, 2005 was 23.5%, representing a decrease of approximately 1.7% from the quarter ended June 30, 2004. This decrease was primarily due to currency appreciation, lower utilization and increased investment in sales & marketing. Return on Capital Employed (ROCE) for the quarter was 56% compared to 62% for the quarter ended June 30, 2004.

As of June 30, 2005, we had 41,911 employees, which include 28,281 employees in the IT Services business and 13,630 employees in the BPO business.

During the quarter, we added 29 new clients. We continued to build on our strengths in Asia with 8 new clients, and further increased our presence in Europe with 5 new clients. Northern Gas Networks (NGN), one of the new independent gas network companies in the UK, has selected Wipro Technologies to implement a complete replacement of its Work and Asset Management systems. Over the next year, Wipro will implement a complete new suite of systems to manage the assets of the gas network in the North of England and to support the staff who operate and maintain the network. The total value of the contract is about GBP 25m.

The Enterprise Applications group showed robust sequential growth adding engagements across verticals. Combining the Telecom Solutions & Embedded & Product Engineering groups, Wipro has what is believed to be the world's largest independent Engineering Services group with over 10,000 engineers. This quarter saw a steady quarter-on-quarter growth of about 5% in this extended engineering space with Wipro setting up Offshore Development Centers with a leading semiconductor equipment manufacturing company & a leading software products company. New clients were also added for specialized offerings such as testing and enterprise securities.