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7/23/2004
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Wipro Posts Strong 1Q Gains

The Indian IT services provider said revenue for the first quarter was up 51% from a year ago, while profits rose 83%.

Indian IT services provider Wipro Technologies reported strong gains in revenue and net income for its first quarter ended June 30--an indication that anti-offshoring sentiment in the United States is having little effect on companies' willingness to send IT work to low-cost countries.

Wipro said late Thursday that first-quarter revenue increased 51% to $385 million compared with a year earlier while net income jumped 83% to $71 million. Per-share earnings improved 79% to 10 cents. The company said it added eight major companies as customers during the period and added more than 3,000 staffers over the past year. It did not identify the customers. Wipro said it expects sales of IT services in its second quarter to increase 8% from the first quarter.

Wipro delivers the bulk of its services from IT facilities in India but also provides on-site domestic support for U.S. customers. However, the company said that its customers are choosing to have more of their work performed offshore. That boosted Wipro's income-to-revenue ratio 5% year-over-year to 25% as the company was better able to utilize its low-cost sites in India. "As more customers become comfortable with the offshore process, it gets easier for them to transfer more components of the job offshore," notes Ashish Thadhani, an analyst at Brean Murray & Co.

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