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Wipro net grows 10.43% to Rs1,456.40 crore in December quarter

For the fourth quarter ending 31st March, Wipro expects revenues from IT services business to be in the range of $1,520 million to $1,550 million, a sequential increase of 1% to 3%, the company said in its filing with the exchanges

Mumbai: IT major Wipro today reported 10.43% increase in consolidated net profit to Rs1,456.40 crore for the third quarter ended 31 December 2011 compared to Rs1,318.80 crore in the corresponding quarter of the previous fiscal, reports PTI.

For the fourth quarter ending 31st March, Wipro expects revenues from IT services business to be in the range of $1,520 million to $1,550 million, a sequential increase of 1% to 3%, the filing added.

“We continue to execute on our strategy and propel the business towards a higher growth trajectory. The overall macro-economic sentiments continue to be uncertain and we are monitoring it closely,” Wipro chairman Azim Premji said.

Net income from sales rose to Rs9,997.20 crore for the December quarter against Rs7,829.30 crore in Q3 FY10-11, it said.

The board of directors have proposed an interim dividend of Rs2 per equity share and ADR (100% on an equity share of par value of Rs2).

IT services business, which contributed 76% of the total revenue during the reporting quarter, added 39 new clients, the company said.

“Our client mining strategy continues to show progress with six customers contributing more than $100 million of revenues. We have improved operating margins through improved revenue productivity and currency benefit,” Wipro executive director and chief financial officer Suresh Senapaty said.

The company’s IT services revenue grew by 12% at $1.5 billion million over the same period last year.

The company added 5,004 employees in the quarter taking the total headcount to 1.36 lakh employees as of 31st December.

“We saw broad-based growth with five of the six verticals growing upwards of 4% in constant currency.

“Revenues in constant currency exceeded the guidance range. We have seen positive feedback from customers and employees on our restructuring approach,” Wipro executive director and CEO IT Business TK Kurien said.

The scrip surged over 5% in morning trade after the company reported 10.43% increase in consolidated net profit for the third quarter ended 31 December 2011.

The shares of the country’s third largest software services exporter rallied 5.14% to an early peak of Rs424.90 on the BSE. On the NSE, too, the stock advanced by 5.13% to Rs424.90.

“The company has guided for muted Q4 FY11-12. We believe better than peers guidance indicates restructuring working well for Wipro,” brokerage firm Prabhudas Lilladher said in a report.

“However, IT services revenue growth as well as profit after tax missed our expectations by a whisker,” it added.

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Bankers demand tax break on interest earned from FDs

 “Bank deposit beyond three years should be treated as capital. We have asked for three years (fixed deposit tenure) ...that’s a view,” SBI chairman Pratip Chaudhuri said after bankers’ pre-Budget consultations with finance minister Pranab Mukherjee

New Delhi: Bankers on Thursday pitched for removal of tax deducted at source (TDS) levied on interest accrued from fixed deposits, to promote savings, reports PTI.

“Bank deposit beyond three years should be treated as capital. We have asked for three years (fixed deposit tenure) ...that’s a view,” State Bank of India (SBI) chairman Pratip Chaudhuri said after bankers’ pre-Budget consultations with finance minister Pranab Mukherjee here.

“Now in bank deposit if a depositor has given the PAN number, then in no way deposit interest can escape from income tax net. So, anybody who has furnished the PAN number, should not have to pay any TDS because that interest would any way be captured into income,” he suggested.

TDS is charged if earnings from interest is Rs10,000 or more.

In India, he said, the bank credit to gross domestic product (GDP) ratio is very low at 45%.

“There is need to improve the ratio. If bank credit to GDP ratio goes up, it would lead to higher output, employment and taxes,” he added.

Demanding a tax break on earnings from term deposits, Mr Chaudhuri said: “We have asked for a level-playing field with debt mutual fund. Level-playing field means that a bank deposit interest for deposit of five years should be given the status of a capital. 

“Because if you put money in a debt mutual fund, which is also investing in debt instruments after one year, it becomes capital”.

Indian Overseas Bank chairman and managing director M Narendra said banks have requested government for tax exemption and increasing TDS limit.

There is a case for increasing the credit to GDP ratio in India which is one of the lowest in the world, Mr Narendra said.

Another suggestion, Mr Chaudhuri said, “we have made, whatever loan loss provisions we make, so long as they are in conformity with what RBI prescribed and prudent provisioning that should be fully allowed as deduction for income tax.

“Today overall cap of 7.5% of the total loans should be done away with. It should be made simple. It is a genuine business cost,” he said.

It was mentioned that savings rate is about 32% but only one third of it reaches banks. Therefore, there is a need for removal of handicaps which banks face in mobilising the deposits.

In view of the high costs of education, it was said that it will be useful if education loan guarantee scheme could be launched, bankers suggested.

Bankers also suggested that there should be a separate taxation window for pension funds and long-term funds. A demand was also made to make banks eligible entities to issue tax-free infrastructure bonds.

Bankers also highlighted the requirement for special incentives for investors to invest in infrastructure bonds.

Kotak Mahindra Bank managing director Uday Kotak said, “We have suggested steps which support flow of domestic savings into equity especially into mutual fund, insurance, and also reduction of transaction tax on cash settled equities.

That can be done by reducing securities transaction tax (STT) on cash equity,”

 

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COMMENTS

Nagesh Kini FCA

5 years ago

This is more or less on the same lines as requested by the Money Life Foundation in a Memorandum to the Finance Minster on Tedious TDS.
Hope and pray it is considered in the Finance Bill 2012 or the DTC.

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