This is a summary of the first quarter fiscal 2008 earnings call conducted by Wipro Ltd. (WIT) on July 18, 2008
Management:
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Chairman: Azim H. Premji
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Joint CEO: Suresh C. Senapaty
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Joint CEO: Suresh Vaswani
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CFO, EVP of Finance: Suresh C. Senapaty
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Chief Executive, Telecom and Product Engineering Solutions: Sudip Nandy
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IR: Sridhar Ramasubbu
Key Investors Issues:
- Revenue was Rs. 59.62 billion ($1.39 billion), representing an increase of 43% over the same period last year.
- Net Income for was Rs.8.14 billion ($190 million1), an increase of 15% over the same period last year.
First Quarter Highlights:
Revenue was Rs. 59.62 billion ($1.39 billion), representing an increase of 43% over the same period last year, driving net income to Rs.8.14 billion ($190 million) or Rs.5.60 (13 cents) a share.
- On the balance sheet, the company has about $2.6 billion of contracts, of rates between 39.5 to 45 rupees a dollar.
- The company had commercial borrowing of $350 million in March 2008.
- The translation loss of Rs. 660 million has been recognized in translation reserves which offset the gain on translating overseas investment.
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IT Services business segment recorded Revenue of Rs. 43.93 billion ($1023 million) an increase of 40% over the same period last year.
- EBIT for this segment was Rs. 8.82 billion ($205 million) an increase of 35% over the same period last year.
- Operating income to revenue for this segment was 20.1%.
- In the transportation Industry group, Wipro won a large deal from one of the leading Mail & Express company in Europe.
- The margin front for global IT business was 21.1% against 21% in the prior period, a 10 basis points expansion.
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IT Products business segment recorded Revenue of Rs. 6.96 billion ($162 million1) an increase of 53% over the same period last year.
-EBIT for this segment was Rs. 305 million ($7.1 million) and operating income to revenue was 4.4% .
- Return on Capital Employed (ROCE) for IT services and Products segment was 37% compared to 44% for the same period last year.
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Consumer Care and Lighting business segment recorded revenue of Rs. 4.75 billion ($111 million1) an increase of 114% over the same period last year.
- EBIT was Rs. 605 million ($14 million) an increase of 98% over the same period last year.
- Operating income to revenue for this segment was 12.7%.
- ROCE for this segment was 13%, compared to 40% for the same period last year.
Applied Innovation:
- Wipro has invested in outcome based models for continuous innovation in delivery.
- The company launched Cigma (Center for Integrated Global Management of Applications), offering a 360 degree Services capability for managing the application landscape of an enterprise spread across the globe.
Awards and Recognition:
- Wipro won the SAP Pinnacle Award for thought leadership around enterprise SOA.
- Wipro was also recognized by Emerson Rosemount as top IT partner for Continuous Improvement in the areas of Quality, Speed, Flexibility, Service, Technology, and Cost.
- Wipro was awarded the Top Network Integrator award for the fourth consecutive year by Voice and Data, and was also ranked as the best APAC partner by Netapp.
- Wipro won the Partner of the year award from IBM and the Fastest growing Solution Partner award for Asia Pacific from Packeteer.
Second Quarter Fiscal 2008:
- The company expects volume led growth with stable pricing.
- Wipro will have the impact of salary increases of its offshore employees in the current quarter.
Key questions and answers from the first quarter fiscal 2008 earnings call, conducted by Wipro Ltd. (WIT) on July 18, 2008
Joseph Foresi:
Has there been any change in tone of what you are seeing in that environment over the past weeks and elaborate any client specific issues both in IT services or consumer products?
Girish S. Paranjpe There is no specific change of tone thereby we are seeing change of direction or change of desire for clients to do work with us or the type of work they would like to do with us.
