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Wipro records 2 percent profit rise, but margins hit

Azim Premji, Chairman of Wipro Ltd., attends the quarterly results at the Wipro campus in Bangalore October 22, 2010. India's No. 3 outsourcing firm Wipro missed quarterly profit estimates as higher wages cut margins, underperforming rivals and sending its shares down more than five percent. REUTERS/Stringer (INDIA - Tags: BUSINESS SCI TECH)

New Delhi: Wipro Ltd, India’s third-largest software services exporter, announced 2 percent rise in quarterly net profit on Monday, in line with street estimates, as it added 39 new customers during the quarter.

The operating margins for its IT services business, however, fell to 20.2 percent in the quarter ended December, from 21.8 percent a year earlier, due to heavy flooding in Chennai city, where it employs about 13 percent of its staff.

Wipro earlier this month named Abidali Neemuchwala as its new chief executive, as it looks to regain market share from larger local outsourcing competitors. Neemuchwala will start in his new role from February first.

The appointment at Bengaluru-based Wipro, majority owned by its founder Azim Premji, comes at a time when the firm is looking to boost business in high-margin new digital technology services.

Wipro’s net profit for the third quarter ended December 31 was 22.34 billion rupees (USD 330.2 million), compared with 21.93 billion rupees a year earlier. (ANI)