Wipro Records 44% Growth in Net Income; Results for the Quarter Ended June 30, 2006 under US GAAP

Business Wire, July 19, 2006

BANGALORE, India & MOUNTAIN VIEW, Calif. -- Wipro Limited (NYSE:WIT) today announced financial results under US GAAP for its first fiscal quarter ended June 30, 2006.

Highlights for the Results:

--Net Income was Rs. 6.14 billion ($134 million(1)), representing an increase of 44% over the same period last year.

--Total Revenue was Rs. 31.31 billion ($683 million(1)), representing an increase of 37% over the same period last year.

--Global IT Services and Products Revenue was Rs. 24.48 billion ($534 million(1)), representing an increase of 42% over the same period last year.

--Global IT Services and Products Earnings Before Interest and Tax (EBIT) was Rs. 5.91 billion ($129 million(1)), representing an increase of 45% over the same period last year.

--Global IT Services and Products added 62 new clients during the quarter.

Outlook for our Quarter ending September 30, 2006

Azim Premji, Chairman of Wipro, commenting on the results said "The results for the quarter were quite satisfying; we enhanced our strategic investments to sustain long term growth even as we continued solid execution leading to improvements in operating performance. Our Global IT Services business continued to witness broad based growth, across Verticals, Geographies and Service lines. The external environment remains buoyant -- we see Offshoring at the center-stage of IT Strategy of Global Corporations. In these exciting times, we are well-positioned to benefit from our diversified service portfolio and deep industry expertise. Looking ahead, for the quarter ending September 2006, we expect our Revenue from our Global IT services business to be approximately $577 million."

Suresh Senapaty, Chief Financial Officer, said "During the quarter ended June 2006, our Global IT Services Revenue at $539.3 M was ahead of our guidance of $533 M. Revenue of Global IT Services segment included $3.2 M from Enabler, acquisition announced and consummated during the quarter. Continuing strong momentum, our Financial Solutions and combined Technology Business delivered 60% and 40% year on year growths respectively. Among service-lines, Testing Services grew 86% year on year while our Technology Infrastructure Services grew 67% year on year. On margin front, improved price realizations, higher utilization, continued improvements in BPO profitability helped in partially offsetting the additional investments in sales and marketing and acquisition related pressures on profitability."

Wipro Limited

Total Revenue for the quarter ended June 30, 2006 was Rs. 31.31 billion ($683 million(1)), representing an increase of 37% over the same period last year. Net Income for the quarter ended June 30, 2006 was Rs. 6.14 billion ($134 million(1)), representing an increase of 44% over the same period last year. Earnings Per Share, for the quarter ended June 30, 2006, was Rs. 4.33 ($0.09(1)), representing an increase of 42% over the same period last year (as adjusted for stock divided paid in August 2005).

Global IT Services and Products (78% of Total Revenue and 91% of Operating Income for quarter ended June 30, 2006)

Our Global IT Services and Products business segment recorded Revenues of Rs. 24.48 billion(2) ($534 million(1)) for the quarter ended June 30, 2006, representing an increase of 42% over the same period last year. EBIT for this segment was Rs. 5.91 billion ($129 million(1)) for the quarter ended June 30, 2006, representing an increase of 45% over the same period last year. Operating Income to Revenue for this segment was 24.2% for the quarter ended June 30, 2006, representing an increase of approximately 60 basis points from the same period last year. This increase was primarily due to more work performed offshore, favorable employee-mix and improved profitability in our BPO Services business. Return on Capital Employed (ROCE) for this segment was 55% for the quarter ended Jun 30, 2006, compared to 56% for the same period last year.

We had 56,435 employees as of June 30, 2006, which includes 40,496 employees in our IT Services business and 15,939 employees in our BPO business. Compared to quarter ended March 31, 2006, this represents a net addition of 2,693 employees which included additional 409 employees from our completed acquisitions.

Our Global Command Center which offers a unique delivery model for outsourced infrastructure services -- won the Marico Foundation and Business World's "Innovation for India" award under the Business Model category in June 2006. Also, Wipro was the only Indian company to figure in Business Week IN 25 Champions of Innovation listing in June 2006.

During the quarter, Wipro made three acquisitions in this segment -- Enabler Informatica -- a Retail Solutions provider based in Europe, Saraware Oy -- an Engineering & Design services provider based in Finland, and Quantech Global Services -- a Mechanical Design Services firm based in US and India. The operating results of Enabler have been consolidated into Wipro's operating results effective June 1, 2006 resulting in additional Revenue of Rs. 149 million ($3.2 million) and PBIT of Rs. 27 million. Saraware Oy has been consolidated into Wipro's operating results with effect from June 30, 2006.