Indian software firms post strong Q1 results

BANGALORE: Two of India’s key software exporters, Wipro and Satyam Computer, posted better-than-expected first quarter results yesterday, but gave cautious outlooks amid uncertain US economic conditions.

The results come after the country’s top two software firms, TCS and Infosys, also reported net profit jumps for the first quarter.

However, the country’s software companies announced cautious full-year revenue forecasts this week, with several US-based clients in the midst of a tough business cycle.

The United States is the major market for India’s software exports and the economic slowdown there has raised concerns about how they will fare in future, despite expanding to Europe, Latin America and the Middle East.

Wipro chairman Azim Premji said in a statement: “Our revenues from IT services at US$1.06 billion was above guidance. Given the environment, we remain cautious in the near-term.

“We expect our revenue from IT services business to be about US$1.08 billion for the second quarter of this fiscal.”

Indian software companies tend to get much of their income from the US, billing in dollars, meaning a weaker rupee can help them price their services more competitively and convert their dollar income into greater local currency.

Bangalore-based Wipro’s net profit rose 25 per cent at 9.08 billion rupees (US$212 million) in the three months to June 30, beating forecasts, and up from 7.1 billion rupees a year earlier, it said in a statement to the Mumbai Stock Exchange.

Satyam said first-quarter net profit rose 44.9 per cent to 5.48 billion rupees from a year earlier as a weaker rupee aided margins and revenue growth. - AFP