India’s third largest outsourcer, Wipro Ltd., on Wednesday reported strong growth in revenue and profits for the quarter ended Dec. 31, a trend for Indian outsourcing companies during the quarter.
Tata Consultancy Services Ltd. (TCS) and Infosys Technologies Ltd., the largest and second largest outsourcers in India, respectively, also reported robust results for the quarter, as more U.S. and European companies, including tech, retail, auto, banks and healthcare, sent work offshore to India.
Wipro of Bangalore saw strong volume growth in its global IT business, particularly from its enterprise application services, technology infrastructure services, and its practices in the energy and utilities markets, the company said.
There is a shift in the market from large outsourcing contracts towards shorter and smaller contracts, and more specialist and single process deals, according to outsourcing advisory firm Technology Partners International Inc (TPI), of Houston, Texas. Service providers with headquarters in India, such as Wipro, TCS, and Infosys, are reaping the benefits of the trend towards single-process and specialist deals, TPI said Tuesday.
Wipro posted revenue of Indian Rupees 39.64 billion (US$899 million at the exchange rate on the closing day of the quarter), up 43 percent compared to the same quarter a year earlier. The company’s profits grew by 40 percent to Rupees 7.45 billion.
The results are based on U.S. generally accepted accounting principles (GAAP), and refer to the third quarter of Wipro’s fiscal year, which differs from the calendar year. The company’s fourth quarter ends on March 31 this year.
Wipro has both a domestic business and an export business. Revenue from its export business for the quarter was Rupees 28.67 billion, up 35 percent over the previous year. The company added 37 new clients during the quarter in its export business.
The company had 66,176 employees as of Dec. 31 in its export business, of which 49,313 were deployed on software and IT services, while the balance of 16,863 were in the company’s business process outsourcing (BPO) business.
Indian outsourcing companies are competing for staff with multinational services companies like IBM Corp. that have set up operations in India to take advantage of lower cost workers. Wipro’s operational improvements and higher profitability in its BPO business helped it offset the pressure on profitability from increasing wages and the appreciation of the Rupee over all major currencies, the company said.