Wipro Records 25% Growth in Net Income; Results for the Quarter Ended December 31, 2005 Under US GAAP

Business Wire, Jan 18, 2006

BANGALORE, India & MOUNTAIN VIEW, Calif. -- Wipro Limited (NYSE:WIT) today announced financial results under US GAAP for its third fiscal quarter ended December 31, 2005.

Highlights:

Results for the quarter ended December 31, 2005

--Net Income grew by 25% over the corresponding period in the previous year to Rs. 5.3 billion ($118 million)

--Revenue increased by 33% over the corresponding period in the previous year to Rs. 27.7 billion ($617 million)

--Global IT Services & Products segment Revenue was Rs. 21.2 billion ($472 million), representing an increase of 33% over the corresponding period in the previous year contributed primarily by volume growth

--Global IT Services & Products Earnings before Interest and Tax (EBIT) was Rs. 5.2 billion ($115 million), a growth of 26% over corresponding period in the previous year

--Global IT Services & Products added 61 new clients in the quarter -- the highest ever customer add.

--The India, Middle East and Asia Pac Business Unit recorded 45% growth in EBIT over the corresponding period in the previous year; and Revenue grew by 19%

Outlook for the Quarter Ending March 31, 2006

Azim Premji, Chairman of Wipro, commenting on the results, said, "The results for the quarter signal the next phase in Wipro's growth. Revenues in our Global IT business were $473 million -- including $1.3 million attributable to acquisition completed during the quarter -- ahead of our guidance of $463 million. Apart from delivering solid Revenue growth, we improved our Operating Margins and increased our share of wallet from key clients, even as we made two strategic acquisitions. We believe that this combination of excellence in operations and strong execution of our strategy is critical to achieve our Vision, and we will continue to focus on both in future as well. Looking ahead, for the quarter ending March 31 2006, we expect Revenues from our Global IT services business to be approximately $510 million."

Suresh Senapaty, Chief Financial Officer, said, "Our differentiated services -- Technology Infrastructure Services, Testing and Enterprise Application Services -- delivered double digit Revenue growth sequentially, ahead of the overall growth rate. Finance Solutions and Technology businesses continued their robust performance, delivering yet another quarter of double digit sequential Revenue growth. Strong volume growth, higher proportion of Offshore projects and continued operational improvements helped offset the impact of lower price realization, lower utilization and the impact of compensation revision for our Offshore team and expand Operating Margins sequentially."

Wipro Limited

Total Revenues for the quarter ended December 31, 2005 were Rs. 27.7 billion ($617 million), representing a 33% increase over the corresponding period in the previous year. Net Income was Rs. 5.3 billion ($118.4 million), representing an increase of 25% over the same period last year. Earnings per share was Rs. 3.78 ($0.08) for the quarter ended December 31, 2005, representing an increase of 23% over the earnings per share of Rs. 3.07 for the quarter ended December 31, 2004.

Global IT Services & Products (76% of Revenues and 89% of Operating Income for Quarter Ended December 31, 2005)

Our Global IT Services & Products business segment recorded Revenue of Rs. 21.2 billion(1) ($471.7 million) for the quarter ended December 31, 2005, representing an increase of 33% over the same period last year. EBIT was Rs. 5.2 billion ($115.3 million) for the quarter ended December 31, 2005, representing an increase of 26% over the same period last year. Operating Income to Revenue for the quarter ended December 31, 2005 was 24.4%, representing a decrease of approximately 1.6% from the quarter ended December 31, 2004. This decrease was primarily due to currency appreciation, lower realization and utilization levels. Return on Capital Employed (ROCE) for the quarter was 64% compared to 68% for the quarter ended December 31, 2004.

We had 51,024 employees as of December 31, 2005, which includes 36,626 employees in IT Services business and 14,398 employees in BPO business. This includes a net addition of 5,189 employees of which 3,770 were in IT Services (including 471 attributable to acquisitions) and 1,419 in BPO business.

During the quarter, we added 61 new clients, including 1 new client in BPO services. In terms of Verticals, the Product Engineering Services business led the customer addition with 20 new clients. Customer addition was strong in North America, where we added 37 clients during the quarter. Some of the key project wins during the quarter include an order from a European Tier 1 automotive vendor for designing car navigation system for the Chinese market and a multi million, multi year contract for complete migration of legacy Banking and Asset Management System to a new platform for a major bank in Continental Europe. In addition, one of the Top 10 Mortgage companies in the US selected Wipro as its strategic partner for its Enterprise BPO work.