India’s Wipro reports 58 percent profit growth

BANGALORE, INDIA — Indian outsourcing company Wipro reported net income of $363 million for the fiscal year to March 31, a jump of 58 percent, it announced Friday.

Revenue also climbed by 39 percent to $1.87 billion, the company said.

Wipro is India’s third-largest outsourcing provider. It has both a domestic and export businesses. The export business, comprised mainly of outsourcing contracts with customers in the U.S., Japan, and Europe, accounted for 75 percent of revenue for the year, the company said.

However, like other Indian outsourcers, Bangalore-based Wipro faces challenges ahead, including the appreciation of the Indian rupee, which has been underway for several months, and growing salaries demanded by staff in India. Employee attrition rates have also been high.

Managing the company’s increasing scale and dealing with the currency uncertainties are among Wipro’s immediate concerns, Azim Premji, Wipro’s chairman, told reporters on Friday.

The attrition rate for Wipro’s BPO business was 23 percent in the quarter. Salaries have also been on the upswing at both its BPO and IT services businesses. Wipro was able to lower its average employee cost, however, by increasing the proportion of junior staff and “freshers” working on projects, said Vivek Paul, the company’s vice chairman.

By using its facilities and staff more efficiently, a pickup in the prices it can charge customers, and by doing more of its projects in India where costs are lower, the company’s operating margin for the year improved, Premji said.

Wipro added 6,982 staff in its IT services business and 6,373 staff in its business process outsourcing (BPO) business during the year. As of March 31, it employed a total of 41,857 staff.

Wipro has integrated the BPO services business it acquired in 2003 with its IT services for vertical markets. It was able to use its client base in IT services to bag BPO contracts as well, said Raman Roy, head of Wipro’s BPO business. “As of March 31 this year, about 38 percent of our customer base in the BPO business were existing customers of our IT services business,” he said.

India’s two biggest outsourcers, Tata Consultancy Services, in Mumbai, and Infosys Technologies, in Bangalore, also posted robust results for the fiscal year to March, riding the boom in offshore outsourcing to India.