Shares of IT services major Wipro today surged nearly 8 per cent after the company reported an 8 per cent growth in consolidated net profit in the December quarter.

Wipro’s scrip gained 7.78 per cent to Rs 598.45 at the BSE.

On the NSE, it climbed 7.82 per cent to Rs 598.50.

Wipro, India’s third largest information technology services company, surprised the Street by delivering better than expected numbers, on the back of demand from customers in health care, life sciences and retail sectors.

The Bengaluru-based company reported a net profit of Rs 2,192 crore for the financial year’s third quarter ended December 31, 2014, up nine per cent over a year and five per cent sequentially. Revenue at Rs 11,992 crore grew six per cent year-on-year and 2.7 per cent sequentially.

The decision of Wipro Enterprises Ltd (WEL), the demerged consumer goods arm of software major Wipro Ltd, to offer an exit option to its minority shareholders has irked one of the proxy advisory firms. Stakeholders’ Empowerment Services (SES) has raised concerns the move might unfairly give 50 per cent stake of the Wipro brand to what will now become a private firm of the promoters.

Markets opened marginally higher with infrastructure stocks leading the gains after the government paved the way for easing the land acquisition Act for public-private partnership and rural infrastructure projects.

At 9:35AM, the 30-share Sensex was down 23 points at 27,372 and the 50-share Nifty was trading 6 points lower at 8,240.

Even as he was spearheading IT services major Wipro, Chairman Azim Premji built a parallel empire for himself through Premji Invest. The entity holds investments in over 40 public and private companies.

While most of the investments have remained under the wraps, Premji Invest's portfolio has a unique mix of companies ranging from sectors like technology, e-commerce, financial services, retail, fashion, healthcare to consumer goods.

Despite positive signs from most quarters, the Indian information technology (IT) services sector might see problems across some business verticals in 2015, clouding client spending during the year.

Among other things, some experts have concerns on banking, the largest vertical for most Indian IT service companies. There are concerns around large banks incurring heavy fines in the US, brokerage firm Motilal Oswal said in a report earlier this month. Additionally, several of the top 10 clients in the banking space in the US are looking to set up captive units and lower their exposure to outsourcing, which could further hit Indian IT services firms. Sectors such as retail and energy, growing at a strong momentum in recent quarters, might also see some slowing. Retail is anticipated to grow slower as the budget of clients in this sector depends heavily on the success of festive season sales – these have not done very well, Motilal Oswal said. Also, the sharp decline in oil prices is seen affecting energy companies negatively.

Having remained the largest private sector employer for decades, the Indian information technology (IT) services sector is perhaps set for a change as three of its largest companies — Tata Consultancy Services (TCS), Infosys and Wipro, have remained slow on hiring in the past few years, hinted at bottom fishing of workforce and ‘restructured’ their senior-level staff.

According to experts, the shift in technology landscape and the resultant change in demand from clients is the major reason for this swing.

Tata Consultancy Services (TCS), India’s largest information-technology services player, is learnt to be undergoing a restructuring exercise. The workforce optimisation programme, in the planning stage, is expected to be over in February 2015.

According to company sources, every vertical has been asked to identify senior staff who have not been very productive. Employees who have been put under the scanner are above the rank of consultant — senior consultant, principal consultant, vice-presidents, etc.

IT services major Wipro has bagged a $143 million 5-year outsourcing deal from Levi Strauss as the US-based denim apparel maker looks to cut 500 jobs in a restructuring exercise.

The restructuring, first announced in March 2014, is expected to generate net annualised cost savings of $175-200 million for Levi Strauss once fully implemented.

Benchmark indices are trading weak after paring early morning gains, ahead of a truncated trading week, with gains in information technology and metal shares offsetting some of the losses posted by auto and consumer durable shares.

At 10:30 AM, Sensex was down 17 points at 26,849 while Nifty was down 9 points at 8,313. In the broader market, BSE Mid cap and Small cap indices have gained around 0.8% each. Market breadth is positive with 1,408 gainers, as against 820 declines.

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