Bangalore, July 24
Wipro Ltd, India's No. 3 software services exporter, joined sector bellwether Infosys in giving a muted forecast for its main IT services business as global spending on outsourcing services slows, pushing Wipro's shares down to a nine-month low.

“We’ve seen high levels of volatility in currencies globally”, Wipro CFO Suresh Senapaty said in the statement. “IT services revenue in dollar terms was impacted by $25 million due to crosscurrency volatility,” he added.

The disappointing outlook from Wipro, controlled by billionaire Azim Premji, also renewed concerns about the Bangalore-based company's ability to preserve market share despite undertaking a major management reshuffle last year.

Wipro said on Tuesday it expects September-quarter IT services revenue of $1.52 billion to $1.55 bn, a rise of 0.3% to 2.3% from the June quarter. Analysts were expecting Wipro to forecast a 2-4% rise.

The IT services unit, including back-office operations outsourcing, accounts for more than 75 percent of sales at the company that also makes soaps, light bulbs and hydraulics equipment.

"The numbers look very bad...It looks like they are yet to be able to turn around their business despite all the restructuring," said Hardik Shah, an analyst at KR Choksey Shares & Securities.

The company last year named veteran T.K. Kurien as the chief executive of the IT services business in place of its joint CEOs to reverse its underperformance compared with larger rivals such as TCS.

Kurien is also attempting to close the narrow lead U.S.-based Cognizant Technology Solutions Corp has established.

India's $100 billion export-driven outsourcing sector is facing diminishing hopes of an early revival in demand as its biggest markets, the United States and Europe, grapple with changes in the economic and political climate.

Earlier this month, Infosys Ltd, the no. 2 software exporter, made a bigger-than-expected cut in its revenue growth forecast for the current fiscal year.

"It's pretty obvious that the volume growth is an issue for the sector," said Apurva Shah, head of investment research at BNP Paribas Mutual Fund, which manages about $750 million in investments, including large-cap Indian software companies. "I don't think there will be any serious improvement in the next few quarters."

Q1 RESULTS: Wipro posted net profit of Rs 1,580 crore in the first quarter of FY2013, posting a 18.4% year-on-ar growth and 6.7% sequentially (quarter-on-quarter) as per the Indian accounting system.

Consolidated revenue for Q1 rose 24% YoY and 7.9% sequentially to Rs 10,653 crore (Rs.106.53 billion), including Rs 8,314 crore from its global IT services.

Under the International Financial Reporting Standards (IFRS), net income for first quarter is $284 million and total income $1.92 billion, including $1.5 billion from IT services. In dollar terms, net income, however, declined 2.4% sequentially from $291 million from previous quarter.

Analysts, on average, had forecast a net profit of Rs 15.95 billion, according to Thomson Reuters I/B/E/S.

Shares of Wipro, which is also listed in New York, fell as much as 4.4% on Tuesday before erasing some of the losses to be down 3.3% at Rs 344.70 on the NSE. 

Oslo, Norway, July 24
Norwegian mobile phone operator Telenor ASA plans to cut 2,000 jobs in India as part of a cost-cutting drive that some analysts saw as a signal it will stay in the country despite recent regulatory problems.

Telenor, which threatened to exit India after it lost its licenses in an industry-wide corruption probe, plans to reallocate resources to more profitable regions in India and brought forward by a year and a half the break-even point for a unit that has never turned a profit.

"By doing this, we believe that we can make (Indian unit) Uninor self-financing, that means cash-flow break-even, within the end of 2013," Chief Executive Jon Fredrik Baksaas said. "In the previous business plan, this target was the first half of 2015."

However, Telenor — which has more than 150 million subscribers across Europe and Asia — would only take part in a new licensing process, expected in late August, if it stayed within its self-imposed Rs 155 billion funding cap, Baksaas added.

Uninor is among eight carriers set to lose a total 122 zonal permits in September, after a Supreme Court order to revoke all licences granted in a scandal-tainted 2G spectrum sale in 2008.

Still, analysts said the restructuring plans represent a subtle shift in Telenor's approach, as a restructuring indicates the company is planning for the long haul rather than getting ready to leave.

"We think Telenor's language signals its intentions at the upcoming auctions," Nomura said in a note to clients.

"We expect this be well received by investors as it helps to reduce the uncertainty for potential outcomes from the auction process," Nomura analysts said. — Reuters

Mumbai, July 24
The rupee fell on Tuesday to its lowest this month, as worries about the eurozone crisis continues to hit global risk assets such as the euro, while investors grow warier after still waiting for government word on policy reforms.

Dollar sales from a telecoms company helped the rupee earlier in the session, but otherwise the local currency traded within a range, reacting mainly to euro movements given the absence of any domestic policy triggers.

Hopes the government would act on long-stalled reforms such as opening up the aviation and retail sectors to foreign investment, or raising diesel prices, had sparked a rally in the rupee from its record low against the dollar in late June.

"The market is waiting for roll out of policies by the government, especially in the area of FDI," said N. S. Venkatesh, treasurer at IDBI Bank.

The rupee fell for a third consecutive session, closing at 56.12/13 per dollar, as per the SBI closing rate from its close of 55.9650/9750 on Monday. It earlier fell to 56.17, its lowest since June 29. — Reuters

Brussels, July 24
Eurozone private sector activity contracted for the 10th time in 11 months in July, sending the rate of job losses to their highest in over two-and-a-half years, a key survey showed Tuesday.

The Purchasing Managers Index (PMI) compiled by business research firm Markit was stuck at 46.4 in July according to a preliminary "flash" reading, indicating another month of contraction in activity.

"The July reading was in line with the average seen in the second quarter, for which the PMI signalled the steepest quarterly downturn for three years," Markit said.

The figures suggest "the euro area downturn showed no signs of letting up at the start of the third quarter and is consistent with gross domestic product (GDP) falling at a quarterly rate of around 0.6 percent, which is similar to the rate of decline we expect to see for the second quarter," said Markit chief economist Chris Williamson.

"The downturn is being led by an increasingly severe slump in manufacturing, where output is falling at a quarterly rate of around 1.0 percent," he said.

While employment fell only slightly in Germany, France saw jobs cut at the fastest pace since December 2009. Across the eurozone, job losses were at the sharpest rate since November 2009. — AFP

Chandigarh, July 24
Just like the small and medium enterprises they represent, the CII Avantha Centre for Competitiveness is now going global. The centre is not only setting up its office in South Africa, it is also helping the SMEs improve their competitiveness globally as they explore the emerging markets in Eastern Europe and South Africa.

The Centre is now involved in training the SMEs on how to improve their competitiveness vis-a-vis global competitors, as they expand in foreign shores. In order to give more exposure to the Indian SMEs , the CII Avantha Centre is also taking delegations of Indian businessmen to Japan and Germany, in order to help them improve their business to business relations.

R. Narayanan, head of the centre, said though their focus was entirely on SMEs in India and helping them reach out to global markets, the Centre was also getting a good response from SMEs in Eastern European, African and Middle Eastern countries. “As word about how the centre has helped SMEs through the cluster approach goes around, we are receiving a good response from these countries. Business delegations are visiting us here, and seeking our help to help them make industry clusters,” he said, on the sidelines of a visit of a 30 member international delegation here.

The centre has already announced it will set up offices and help entrepreneurs in South Africa and Malawi to adopt a cluster approach. A similar centre is also expected to be set up in Mauritius.

“In India we have impacted 2,300 SMEs through the cluster approach, and have helped develop 220 clusters along with our strategic partners. Recently, we have started e-learning concept in our cluster development programme with two business modules, which has been used by 150 companies. We will soon launch the third business module, which will improve our reach through e-learning drastically,” said Narayanan.