Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TDS :: ACCOUNTING STANDARD :: cpt :: Central Excise rule to resale the machines to a new company :: TAX RATES - GOODS TAXABLE @ 4% :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: form 3cd :: VAT Audit :: VAT RATES :: articles on VAT and GST in India
 
 
« General »
 Tax breather for foreign investors: All you need to know
 What the increase in tax collections does not tell us about Indian economy post demonetisation
 India’s crazy retrospective tax on foreign funds will tarnish country’s reputation
 How tax related, PAN grievances can be resolved through E-Nivaran
 Tackling income tax exemptions for equities and agriculture
 Amfi wants tax benefits for retirement plans
 Top five factors which could chart market direction in the coming week
 Tax rate hikes boost shadow economy
 Tax mop-up may decline in new amnesty scheme
 Weeks before Budget, Finance Minister Arun Jaitley lists out benefit of low tax rates
 Second home loan tax benefits

Proposed salary increase, tax outgo to hit profit: Wipro
April, 28th 2011

Wipro's fourth quarter results were in line with market's expectations. Despite this, its stock fell by nearly 3% on Wednesday, after the country's third-largest IT exporter guided for a dismal June quarter.

At the higher end of the guidance range, Wipro expects a 1.5% sequential revenue growth in the dollar terms for the first quarter of FY12. Its larger peer Infosys, too, has guided for a 1.8% revenue growth for the quarter. This puts a question mark over the near-term outsourcing demand scenario.

Over the past few quarters, Indian IT exporters have reported a strong traction in the global offshoring demand. With multiyear discretionary projects back on track, top IT players have so far reported a 4-6% sequential volumes growth.

Some industry trackers feel that this, however, may recede if the economies in Europe and the US take longer to recover. Apart from the external factors, Wipro has to also grapple with concerns related to its own growth. The company has been a laggard in winning new business compared with its peers, TCS and Infosys.

In the past three fiscals, Wipro's share in the total incremental revenue of the three players declined by 10 percentage points to 21% in FY11. Also, the profitability of its incremental revenue almost halved during the period. To address its growth concerns, Wipro has undertaken an internal restructuring exercise across verticals. It has also continued its inorganic growth strategy.

These factors will play a crucial role in determining the company's growth in the next four-six quarters. For instance, recently, the company acquired SAIC (Science Application International Corporation), a firm focused on oil and gas software for $150 million. The buyout is likely to enhance the company's offerings in the energy and utilities space which forms nearly 10% of the company's overall revenue.

This is the company's eighth acquisition in the past five years, however the strategy has not propelled well for Wipro's growth over the years. Wipro will also have to reconsider its strategy of keeping a low profile in the fast-growing banking and finance vertical.

Wipro draws nearly 27% of its revenue from the BFSI segment against over 40% drawn by TCS. In the near term, Wipro's profitability will continue to face pressure given the proposed 12-15% salary increase and higher tax outgo.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Article Management Solutions System Article Management Software S

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions