* Wipro Q4 net profit rises 29 pct, ahead of estimates
* Worldwide IT spending seen up 3.1 pct in 2014 -Gartner
(adds background, detail)
By Anannya Pramanick and Nivedita Bhattacharjee
BANGALORE/MUMBAI, April 17 (Reuters) - Wipro,
India's third-biggest IT services exporter, posted
forecast-beating quarterly profit on Thursday and said it
expects a stronger year ahead on increased spending by overseas
The company is part of a $100 billion-plus Indian
outsourcing sector that generates about 90 percent of its sales
from providing services such as IT network installation and the
development of software applications for overseas clients that
are finally beginning to loosen their purse strings.
Rivals Tata Consultancy Services, Infosys
and HCL Technologies have already signalled a pick-up
in client spending this month, and Wipro says it will also
"The way our trends are ... growth in full-year 2015 will be
better than growth in full-year 2014," Chief Executive T.K.
Kurien said on Thursday after Wipro reported a 29 percent rise
in fourth-quarter net profit.
Global IT spending is projected to total $3.8 trillion this
year, up 3.1 percent on 2013, according to the latest forecast
by research firm Gartner. That marks a significant upturn from
the modest 0.4 percent increase a year earlier.
"Discretionary spending at clients had almost dried up since
the recession, and companies cannot go on postponing that for
ever," said Ankita Somani, a sector analyst with Mumbai
brokerage Angel Broking.
"I think this year some of that spending will come back, and
that will help IT companies."
India's export-driven software services sector has thrived
by tapping a large pool of cheap skilled labour, but rising
wages and high staff turnover rates remain a challenge.
Wipro gave a muted revenue forecast for the June quarter,
but CEO Kurien attributed that to a traditionally weak season
and said it is not a precursor to the year.
Revenue from IT services are expected to be between $1.72
billion and $1.76 billion in the current quarter, the company
said, representing quarter-on-quarter growth of as much as 2
For the quarter to March 31, Wipro said net profit rose to
22.27 billion rupees ($368.98 million) compared with 17.29
billion rupees a year earlier. Analysts polled by Thomson
Reuters had forecast 21.06 billion rupees in net profit.
HCL Technologies also beat market expectations with a 59
percent rise in quarterly profit, it said on Thursday, helped by
rising demand for outsourcing services.
On Wednesday Tata Consultancy Services said it expects a
further rise in revenue growth this year, citing its improving
deal pipeline and order book.
Shares of Bangalore-based Wipro closed up 2.4 percent at
585.85 rupees ahead of Thursday's earnings announcement, while
HCL Technologies gained 0.9 percent in a Mumbai market
that rose 1.6 percent.
($1 = 60.3550 Indian Rupees)
(Additional reporting by Aradhana Aravindan; Editing by Sumeet
Chatterjee and David Goodman)