Riding on improved deal flows and margin expansion, Wipro followed its peer IT companies

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in posting a sequential growth in revenue in the second quarter of fiscal 2009-10 after three quarters of decline due to economic slowdown. The company saw revenue from its flagship IT services business rise 3.5 per cent quarter on quarter (QoQ) and 5 per cent year on year (YoY) to Rs 4,996 crore. Profit before interest & tax for IT services stood at Rs 1,187 crore, a growth of 19 per cent YoY.

Talking about the improving global IT market scenario Wipro chairman Azim Premji said, “The overall market environment is stabilising and things are looking much better going forward. We see more stability in volumes and pricing as well as improved demand.’’

The company has guided for revenues to be in the range of $1.09 billion- $1.11 billion, a sequential increase of 2.5 per cent to 4.5 per cent, for the IT services business for the third quarter ending December. Margins for the IT services business stood at 23.8 per cent, a rise of 143 bps sequentially and 279 bps YoY, said Wipro CFO Suresh Senapaty.

Joint CEO of the firm Girish Paranjpe said the BFSI segment has seen good pick-up. “We see it continuing in Q3 also. There are two kinds of engagements coming – new clients and existing clients signing for new projects including merger related work.’’

During the quarter, the company saw traction from energy & utilities, communication & media service provider, healthcare, retail and transportation sectors and added 37 new clients. Major deals won include the 5-year engagement with British Petroleum, Australian beer maker Fosters Group, Nokia Siemens Networks, Delhi International Airport and Lavasa.

Wipro, as a group (which includes businesses such as lighting and soaps), saw revenue of Rs 6,917 crore, a YoY growth of 6 per cent while profit after tax grew by 19 per cent to Rs 1,162 crore. IT products business saw net sales of Rs 1,183 crore, increasing by 18 per cent. The company’s soap unit WCCL’s income stood at Rs 587 crore, growing by 11 per cent in the quarter.

ShareKhan’s IT analyst Deepak Purswani said, “The BFSI sector has seen a revival, and that’s reflected in the numbers. But we’ll have to wait for one or two more quarters to assess the situation, before saying there has been a real turnaround.” HR head Pratik Kumar said some of the action on performance review had its impact during this quarter, taking involuntary attrition to 3.1 per cent.