Wipro profit up, but below forecasts

Most of India's software exports go to the U.S.

BANGALORE, India -- Indian software giant Wipro Ltd reported a 97 percent rise in consolidated net profit for the past quarter on Friday.

The result was below expectations, but Wipro said it still expected to grow faster than the industry average.

Wipro is India's third-largest software exporter and includes among its customers Nortel Networks, Cisco Systems and telecom equipment makers Lucent Technologies and Alcatel.

The Bangalore-based company posted a profit of 2.14 billion rupees ($45.4 million) for the June quarter. Net profit of the parent company alone rose 93 percent to 2.08 billion rupees, on sales of 7.9 billion rupees, up 28 percent.

Meager growth in software services

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A Reuters poll of 12 brokerages had forecast net profit would rise 108 percent, and sales by 47 percent.

"The net profit is lower than expected. It is primarily due to meager growth in software services on a sequential basis (quarter on quarter)," said R. Ravi, a software analyst with ICICI Securities and Finance Company Ltd.

Wipro said it had won a $70 million contract from a telecom subsidiary of U.K.-based utility Lattice Group Plc and expects the project to generate revenue in excess of $30 million in the current financial year.

That should help compensate for a fall in business from telecom companies. Wipro's heavy reliance on troubled global telecom clients has stunted growth and was cause for concern, analysts said.

Company expects to beat industry average

Wipro's vice-chairman Vivek Paul told Reuters the company expects to grow faster than the industry average this year.

"These are turbulent times ... but we still believe that our revenue will grow above industry growth rates," he said.

The National Association of Software and Service Companies (NASSCOM) has forecast Indian software exports will rise 40 to 45 percent this year to more than $6 billion, despite the global slowdown in IT spending.

The U.S. accounts for about 60 percent of India's software exports.

Wipro traded at 1379 rupees late on Friday, a 1 percent rise on Thursday's close of 1365 rupees.

Reuters contributed to this report.