Wipro rides Indian outsource wave

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Wipro has become the latest Indian services company to report bumper profits as it rides the wave of Western firms outsourcing operations to India.

India's third-biggest software company saw net profit for the three months to September rise 48% to $152m (£81m).

Wipro said it won 54 new clients and hired 5,328 new staff in the period.

Huge demand from firms outsourcing software development and back-office work to India has boosted profits at Wipro and its rivals TCS and Infosys.

Wage pressure

TCS and Infosys have announced second-quarter profits up 44% and 53% respectively in recent weeks - all three companies beat analyst forecasts.

Looking forward, Bangalore-based Wipro said it expected sales from its global IT services business to rise 34% to $633m in the final three months of 2006 compared to the same period a year ago.

"The numbers look very strong," said Sorbh Gupta, an analyst with Pranav Securities.

"The positive surprise has been the maintenance of the margins. We expected a decline."

Wipro said that the improved efficiency and increased profitability from its outsourcing division had helped to offset the cost of its rising wage bills.

However, it did say that its profit margins up until the end of this year would be 2% lower after it gave staff a September pay rise.