Indian IT giant, Wipro has recorded an increase of 1 per cent in its profits for the second quarter of the year beating market expectations.

The increase in profit was mainly due to a weaker rupee and an increase in spending on outsourcing by its clients in the international markets. The company’s net profit in the quarter rose to Rs 1301 crore from Rs 1285 crore in the same period last year.

The total revenue of the firm rose 18 per cent to Rs 9094 crore and the company managed to add 44 new clients in its IT services business. Meanwhile, the company also added 5,240 staff in the September quarter in its IT services business

India’s $76 billion industry generates more than 90 per cent of its revenue from providing technology services to international partners. Most of the technology services are provided to clients in the US and Europe. Europe is the second largest market for the software firms.

"Macroeconomic sentiments continue to remain uncertain. We have seen growth momentum build up in our IT business with healthy volume growth," said the company’s Chairman Azim Premji.

Credit rating agency Standard & Poor’s (S&P) analysts have said in a latest report that Indian IT sector majors including Tata Consultancy Services, Infosys and Wipro are expected to grow in double digits in the coming few years, ahead of industry average.

The report read that the risks related to business and reputation are rising because of rising protectionism, “but the three largest Indian IT companies are expected to adapt to the challenges, as they have in the past.”

The report also noted that these firms will face a major long term challenge as foreign companies increase their workforce in India. They also face other challenges such as their dependence on the slowing economies of the US and Europe, visa issues, rising wages in India and foreign exchange fluctuations.

Many countries are moving away from outsourcing due to high unemployment, slowdown in economic growth and political issues. S&P has given TCS and Infosys BBB+ and Stable rating, while Wipro holds BBB and positive credit rating.