Rise in Wipro's profits by 24% due to divestment of non-IT sector division
In a significant move, Indian IT services giant Wipro has decided to separate its IT functions from its non-IT arms. This decision comes as the company reports a strong performance in the quarter ending September 30, with profits of 16.11 billion rupees ($304 million) and sales reaching 106.57 billion rupees ($2.01 billion), marking an increase of 17% year-on-year.
T K Kurien, the executive director and CEO of Wipro's IT Business, has stated that the company is continuing to invest in its strategy to drive business transformation at the intersection of Cloud, Mobility, Analytics, and Social. Wipro's focus remains on operational improvements to mitigate the incremental impact of wage increases and currency volatility.
The demerger is expected to enhance value for all stakeholders and provide fresh momentum for growth for each of Wipro's businesses. Wipro Enterprise Limited has been formed, overseeing what was previously Wipro's Consumer Care & Lighting, Infrastructure Engineering, and Medical Diagnostic Product & Services divisions.
In other news, Wipro has entered a long-term strategic partnership with Qatar Airways to develop a solution for cargo management and revenue accounting. The company is also continuing to invest in its Go-To-Market organization in order to engage effectively with both business and technology stakeholders.
Recent publicly available sources do not specify which clients Wipro has won through new contracts or the projects involved in the past months. However, several multi-million pound deals are expected to aid Wipro's revenue in the third quarter ending December 31.
Wipro expects revenue from its IT services business to be between $1.560 and $1.590 billion in the third quarter. The IT Services division accounted for 79% of Wipro's total revenue for the quarter.
In a separate development, Philips has outsourced the replacement of an existing internal messaging platform with a hosted messaging solution for a leading provider of renewable energy in Germany to Cognizant. Philips has also outsourced quality assurance for a retail departmental store chain in North America to Cognizant.
Wipro chairman Azim Premji has expressed confidence in the demerger, stating that it will provide a fresh momentum for growth for each of Wipro's businesses. The profits for the quarter beat analysts' expectations, with a net profit of 15.37 billion rupees predicted by Thomson Reuters I/B/E/S.
As Wipro moves forward, it continues to position itself as a key player in the global IT services industry, with a focus on innovation and growth.
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