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EDITIONS
Friday, 19 July, 2002, 12:38 GMT 13:38 UK
Wipro disappoints once again
An Indian internet cafe
Wipro has had to write off its internet business
Indian software services giant Wipro has once again disappointed investors, posting another weak profit after writing off its internet access business.

During the three months to the end of June, Wipro made a net profit of 1.6bn rupees (21m; $33m), well below the expectations of analysts, who had forecast half as much again.

While Wipro has remained profitable, unlike many tech firms, its results have dwindled in recent months thanks to the global slowdown in technology spending.

Some of its biggest clients were telecoms multinationals such as Alcatel and Nortel, which have cut spending to the bone over the past year.

Over the same period, Wipro's shares have been sluggish performers, and have lost one-third of their value this year.

Jeers at home...

In the hope of sparking investor interest, Wipro has embarked on a series of acquisitions.

In its latest deal, it is to pay $83m for a further 66% stake in Spectramind, the largest contract provider of business process outsourcing services in India.

Wipro shares
Wipro's takeover of Spectramind, on which it will have spent $93m to date, is the biggest deal so far in India's IT services industry.

Unimpressed, investors dumped Wipro stock, which fell by another 3.2% on the Bombay Stock Exchange.

... cheers abroad

Far more pleasing is Wipro's continuing success in overseas markets, where it develops software solutions for multinational clients.

Its global division, Wipro Technologies, which is India's third-largest hi-tech exporter, saw a 21% jump in sales to 6.3bn rupees.

Pre-tax profit, meanwhile, increased 5% to 2bn rupees, despite cuts in the rates the firm charges clients.

Falling rates have seen Wipro Technologies' operating profit margin shrink to 31%, down from 36% a year ago.

See also:

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