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Wipro: Good end to an otherwise tepid year - Views on News from Equitymaster

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Wipro: Good end to an otherwise tepid year

Apr 27, 2011

Wipro has announced the fourth quarter results of financial year 2010-2011 (4QFY11). The company has reported a 6.2% QoQ and 4.3% QoQ growth in sales and net profits respectively. Here is our analysis of the results.

Performance summary
  • Sales grow by 6.2% QoQ during the quarter. This was driven by 1.9% QoQ growth in volumes. For the year ended March 2011, sales grew by 14.5% YoY.
  • Operating margins decline by 0.7% QoQ due to higher selling and distribution expenses (as a percentage of sales). For the full year FY11, operating margins declined to 21.0% from the 22.1% seen for the same period last year.
  • Net profits grow by 4.3% QoQ. The lower operating margins were offset by higher other income and lower tax expenses. For the full year FY11 (year ended March 2011), net profits increased by 15.3% YoY. This was on account of higher other income as well as lower tax expenses.
  • Employee strength of the IT services business stood at 122,385 at the end of March 2011. IT services added 2,894 (net) employees during 4QFY11. Attrition rose to 22.7% as compared to 21.6% for the last quarter (December 2010).
  • IT services segment adds 68 new clients during the quarter, thereby taking the total count of active clients to 904.
  • Gross utilization rate was marginally up to 68.9% during the quarter as compared to 68.6% seen last quarter (3QFY11).
  • Declares a final dividend of Rs 4 per share (yield of 0.9%). Including this total dividend for the year would be Rs 6 per share (yield of 1.3%).

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