Wipro Limited Announces Results for the Quarter Ended December 31, 2019 Under IFRS

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Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for its quarter ended December 31, 2019.

Highlights of the Results

Results for the Quarter ended December 31, 2019:

  • Gross Revenue was Rs 154.7 billion ($2.2 billion1), an increase of 2.7% YoY
  • IT Services Segment Revenue was at $2,094.8 million, a sequential growth of 2.2%
  • Non-GAAP2 constant currency IT Services Segment Revenue increased by 1.8% QoQ
  • IT Services Operating Margin3 for the quarter was at 18.4%, an increase of 0.3% QoQ
  • Net Income for the quarter was Rs 24.6 billion ($344 million1), a decrease of 2.2% YoY
  • EPS for the quarter was Rs 4.3 ($0.061) per share and grew 3.2% YoY
  • Wipro declared an interim dividend of Rs 1 ($0.0141) per equity share/ADS

Performance for the quarter ended December 31, 2019

Abidali Z. Neemuchwala, CEO and Managing Director said, “We have delivered a good quarter with secular growth across all business units, geographies and practices. We remain focused on deepening our customer relationships, converting our funnel and winning large deals.”

Jatin Dalal, Chief Financial Officer said, “We expanded operating margins by 0.3% aided by a favorable movement in the currency. Further, we generated strong operating cash flows led by disciplined execution at 124% of our Net Income.”

Outlook for the quarter ending March 31, 2020

We expect Revenue from our IT Services business to be in the range of $2,095 million to $2,137 million*. This translates to a sequential growth of 0.0% to 2.0%.

* Outlook is based on the following exchange rates: GBP/USD at 1.30, Euro/USD at 1.11, AUD/USD at 0.68, USD/INR at 71.28 and USD/CAD at 1.32

IT Services

Wipro continued its momentum in winning large deals globally as described below:

  • Wipro has secured a multi-year managed IT services contract from a leading airport in the Middle East wherein Wipro will leverage its strong domain expertise, digital transformation & innovation capabilities and integrated service delivery model to transform the airport’s IT operations
  • Wipro has won a large strategic deal from a leading European manufacturer of hi-tech components for the automotive industry to consolidate, standardize, and automate their IT operations globally. The engagement will drive operational excellence, enhance user experience and foster innovation. This will be done leveraging the hyper-automation capabilities of Wipro HOLMES™, Wipro’s global delivery model and strong domain & digital expertise
  • Wipro has been awarded a strategic multi-year cyber governance, cloud and infrastructure services transformation engagement by Olympus, a global medtech company headquartered in Japan
  • Wipro has won a multi-year managed services contract from a leading UK-headquartered construction company to run and transform their entire IT operations and enhance user experience
  • A multinational food and drink processing conglomerate has awarded its Platform and Cloud Services contract with Wipro to transform their operations and ensure next-generation service readiness

Digital & Cloud Application Services Highlights

We continue to see increasing traction in digital oriented deals as illustrated below:

  • Wipro has secured a contract from one of the largest US-based integrated healthcare delivery systems to bolster enterprise security and operations, leveraging Wipro’s Security Intelligence as a Service (SIaaS) managed services
  • A US-based healthcare company has awarded Wipro a contract to streamline their enterprise operations and deploy new technologies to enable rapid growth, leveraging Topcoder
  • A European start-up has awarded Wipro Digital a multi-year, multi-million-dollar strategic contract to develop and run a new-age payment and loyalty solution for the hospitality, travel and retail industry, leveraging Topcoder
  • Wipro has secured a strategic contract from a global supplier of semiconductors and infrastructure software products to accelerate their product development
  • A multinational financial services company has awarded Wipro Digital a contract to reimagine and redesign its investment platform

Analyst Accolades and Awards

  • Wipro positioned as a Leader in Gartner Magic Quadrant for Application Testing Services, Worldwide, Gunjan Gupta et al., 25 Nov 2019
  • Wipro positioned as a Leader in IDC MarketScape Worldwide Business Process Outsourcing for AML and KYC 2019 Vendor Assessment (Doc #US44398519, December 2019)
  • Wipro recognized as a Leader and Star Performer by Everest Group in Enterprise Blockchain services PEAK Matrix™ Assessment 2020
  • Wipro recognized as a Leader and Star Performer by Everest Group in Application Transformation Services PEAK Matrix™ Assessment 2020
  • Wipro recognized as a Leader and Star Performer in Everest Group Application and Digital Services in Capital Markets – Services PEAK Matrix™ Assessment 2020
  • Disclaimer: Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

All product names, logos, and brands are property of their respective owners.

IT Products

  • IT Products Segment Revenue for the quarter was Rs 2.6 billion ($36.1 million1).
  • IT Products Segment Results for the quarter was a loss of Rs 0.14 billion ($1.96 million1).

India State Run Enterprises (ISRE)

  • India SRE Segment Revenue for the quarter was Rs 1.8 billion ($25.9 million1).
  • India SRE Segment Results for the quarter was a loss of Rs 0.53 billion ($7.4 million1).

Please refer the table at the end for reconciliation between IFRS IT Services Revenue and IT Services Revenue on a non-GAAP constant currency basis.

About Non-GAAP Financial Measures

This press release contains non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K. Such non-GAAP financial measures are measures of our historical or future performance, financial position or cash flows that are adjusted to exclude or include amounts that are excluded or included, as the case may be, from the most directly comparable financial measure calculated and presented in accordance with IFRS. The tables at the end provide IT Services Revenue on a constant currency basis, which is a non-GAAP financial measure that is calculated by translating IT Services Revenue from the current reporting period into U.S. dollars based on the currency conversion rate in effect for the prior reporting period. We refer to growth rates in constant currency so that business results may be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance. Further, in the normal course of business, we may divest a portion of our business which may not be strategic. We refer to the growth rates in both reported and constant currency adjusting for such divestments in order to represent the comparable growth rates.

This non-GAAP financial measure is not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, the most directly comparable financial measure calculated in accordance with IFRS and may be different from non-GAAP measures used by other companies. In addition to this non-GAAP measure, the financial statements prepared in accordance with IFRS and the reconciliation of these non-GAAP financial measures with the most directly comparable IFRS financial measure should be carefully evaluated.

Results for the quarter ended December 31, 2019, prepared under IFRS, along with individual business segment reports, are available in the Investors section of our website LINK 

Quarterly Conference Call

We will hold an earnings conference call today at 7:15 p.m. Indian Standard Time (8:45 a.m. U.S. Eastern Time) to discuss our performance for the quarter. The audio from the conference call will be available online through a web-cast and can be accessed at the following link- LINK  .

An audio recording of the management discussions and the question and answer session will be available online and will be accessible in the Investor Relations section of our website at www.wipro.com

About Wipro Limited

Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) is a leading global information technology, consulting and business process services company. We harness the power of cognitive computing, hyper-automation, robotics, cloud, analytics and emerging technologies to help our clients adapt to the digital world and make them successful. A company recognized globally for its comprehensive portfolio of services, strong commitment to sustainability and good corporate citizenship, we have over 175,000 dedicated employees serving clients across six continents. Together, we discover ideas and connect the dots to build a better and a bold new future.

Forward-Looking Statements

The forward-looking statements contained herein represent Wipro’s beliefs regarding future events, many of which are by their nature, inherently uncertain and outside Wipro’s control. Such statements include, but are not limited to, statements regarding Wipro’s growth prospects, its future financial operating results, and its plans, expectations and intentions. Wipro cautions readers that the forward-looking statements contained herein are subject to risks and uncertainties that could cause actual results to differ materially from the results anticipated by such statements. Such risks and uncertainties include, but are not limited to, risks and uncertainties regarding fluctuations in our earnings, revenue and profits, our ability to generate and manage growth, complete proposed corporate actions, intense competition in IT services, our ability to maintain our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which we make strategic investments, withdrawal of fiscal governmental incentives, political instability, war, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our business and industry. Additional risks that could affect our future operating results are more fully described in our filings with the United States Securities and Exchange Commission, including, but not limited to, Annual Reports on Form 20-F. These filings are available at LINK  . We may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company’s filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf.

  1. For the convenience of the readers, the amounts in Indian Rupees in this release have been translated into United States Dollars at the certified foreign exchange rate of US$1 = Rs 71.36, as published by the Federal Reserve Board of Governors on December 31, 2019. However, the realized exchange rate in our IT Services business segment for the quarter ended December 31, 2019 was US$1= Rs 72.09
  2. Constant currency revenue for a period is the product of volumes in that period times the average actual exchange rate of the corresponding comparative period
  3. IT Services Operating Margin refers to Segment Results Total as reflected in IFRS financials

 

 

 

WIPRO LIMITED AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(Rs in millions, except share and per share data, unless otherwise stated)

 

 

As at March 31, 2019

As at December 31, 2019

 

Convenience translation
into US dollar in millions
Refer footnote 1

ASSETS

 

Goodwill

 

116,980

123,706

1,734

Intangible assets

 

13,762

14,632

205

Property, plant and equipment

 

70,601

78,552

1,101

Right-of-use assets

 

-

15,706

220

Financial assets

 

Derivative assets

 

173

-

-

Investments

 

6,916

9,045

127

Trade receivables

 

4,373

4,373

61

Other financial assets

 

5,146

4,790

67

Investments accounted for using the equity method

 

1,235

1,291

18

Deferred tax assets

 

5,604

5,943

83

Non-current tax assets

 

20,603

12,412

174

Other non-current assets

 

15,872

11,652

163

Total non-current assets

 

261,265

282,102

3,953

Inventories

 

3,951

2,063

29

Financial assets

 

Derivative assets

 

4,931

1,352

19

Investments

 

220,716

164,256

2,302

Cash and cash equivalents

 

158,529

186,637

2,615

Trade receivables

 

100,489

100,622

1,410

Unbilled receivables

 

22,880

24,663

346

Other financial assets

 

14,611

9,538

134

Contract assets

 

15,038

14,553

204

Current tax assets

 

7,435

3,459

48

Other current assets

 

23,086

21,999

308

 

571,666

529,142

7,415

Assets held for sale

 

240

-

-

Total current assets

 

571,906

529,142

7,415

 

TOTAL ASSETS

 

833,171

811,244

11,368

 

EQUITY

 

Share capital

 

12,068

11,426

160

Securities premium reserve

 

533

1,179

17

Retained earnings

 

534,700

503,167

7,051

Share-based payment reserve

 

2,617

2,203

31

Other components of equity

 

18,198

21,679

304

Equity attributable to the equity holders of the Company

 

568,116

539,654

7,563

Non-controlling interest

 

2,637

1,580

22

TOTAL EQUITY

 

570,753

541,234

7,585

 

LIABILITIES

 

Financial liabilities

 

Long - term loans and borrowings

 

28,368

22,299

312

Derivative liabilities

 

-

4

Lease liabilities

 

-

10,632

149

Other financial liabilities

 

-

5

-

Deferred tax liabilities

 

3,417

3,522

49

Non-current tax liabilities

 

11,023

11,549

162

Other non-current liabilities

 

5,258

6,152

86

Provisions

 

2

2

-

Total non-current liabilities

 

48,068

54,165

758

Financial liabilities

 

Loans, borrowings and bank overdrafts

 

71,099

72,380

1,014

Derivative liabilities

 

1,310

1,573

22

Trade payables and accrued expenses

 

88,304

80,570

1,130

Lease liabilities

 

-

6,389

90

Other financial liabilities

 

644

604

8

Contract liabilities

 

24,768

21,153

296

Current tax liabilities

 

9,541

13,903

195

Other current liabilities

 

18,046

18,749

263

Provisions

 

638

524

7

Total current liabilities

 

214,350

215,845

3,025

TOTAL LIABILITIES

 

262,418

270,010

3,783

 

TOTAL EQUITY AND LIABILITIES

 

833,171

811,244

11,368

 

WIPRO LIMITED AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENT OF INCOME

(Rs in millions, except share and per share data, unless otherwise stated)

 

Three months ended December 31,

Nine months ended December 31,

 

2018

2019

2019

2018

2019

2019

 

Convenience
translation into US
dollar in millions
Refer footnote 1

Convenience
translation into US
dollar in millions
Refer footnote 1

Revenues

 

150,595

154,705

2,168

435,782

453,122

6,350

Cost of revenues

 

(103,971)

(109,673)

(1,537)

(306,091)

(321,952)

(4,512)

Gross profit

 

46,624

45,032

631

129,691

131,170

1,838

 

Selling and marketing expenses

 

(11,889)

(11,030)

(154)

(33,516)

(32,612)

(457)

General and administrative expenses

 

(6,978)

(7,496)

(105)

(29,282)

(22,142)

(310)

Foreign exchange gains/(losses), net

 

911

727

10

2,899

2,176

30

Other operating income

 

-

-

-

2,798

749

10

Results from operating activities

 

28,668

27,233

382

72,590

79,341

1,111

 

Finance expenses

 

(1,627)

(1,844)

(26)

(4,845)

(5,675)

(80)

Finance and other income

 

5,362

5,370

75

15,695

19,174

269

Share of net profit /(loss) of associates accounted for using the equity method

 

7

34

-

(26)

16

-

Profit before tax

 

32,410

30,793

431

83,414

92,856

1,300

Income tax expense

 

(6,966)

(6,164)

(86)

(18,178)

(18,594)

(261)

Profit for the period

 

25,444

24,629

345

65,236

74,262

1,039

 

Profit attributable to:

 

Equity holders of the Company

 

25,103

24,558

344

65,198

73,958

1,035

Non-controlling interest

 

341

71

1

38

304

4

Profit for the period

 

25,444

24,629

345

65,236

74,262

1,039

 

Earnings per equity share:

 

Attributable to equity share holders of the Company

 

Basic

 

4.18

4.31

0.06

10.86

12.58

0.18

Diluted

 

4.17

4.30

0.06

10.83

12.55

0.18

 

Weighted average number of equity shares

 

used in computing earnings per equity share

 

Basic

 

6,006,062,585

5,692,132,118

5,692,132,118

6,006,193,456

5,879,588,157

5,879,588,157

Diluted

 

6,020,671,301

5,703,265,041

5,703,265,041

6,020,140,129

5,892,966,906

5,892,966,906

 

Particulars

Three months ended

Nine months ended

Year ended

December 31,
2019

September 30,
2019

December 31,
2018

December 31,
2019

December 31,
2018

March
31, 2019

Audited

Audited

Audited

Audited

Audited

Audited

Revenue

 

IT Services

 

BFSI

46,612

45,760

45,979

137,767

129,219

175,262

Health BU

19,799

18,981

19,241

57,651

55,793

75,081

CBU

25,443

23,530

22,875

71,339

65,646

89,313

ENU

19,553

18,888

18,996

56,873

54,202

72,830

TECH

18,584

19,148

19,104

56,392

58,189

76,591

MFG

12,450

11,886

11,981

35,672

34,945

46,496

COMM

8,565

8,368

8,480

25,387

24,394

32,680

Total of IT Services

151,006

146,561

146,656

441,081

422,388

568,253

IT Products

2,576

3,233

3,145

8,218

9,553

12,312

ISRE

1,847

2,069

1,713

6,059

6,757

8,544

Reconciling Items

3

(16)

(8)

(60)

(17)

(49)

Total Revenue

155,432

151,847

151,506

455,298

438,681

589,060

 

Other operating Income

 

IT Services

-

50

-

749

2,798

4,344

Total Other Operating Income

-

50

-

749

2,798

4,344

 

Segment Result

 

IT Services

 

BFSI

8,246

8,407

9,095

25,988

24,182

33,831

Health BU

3,186

2,863

1,973

8,978

6,698

8,638

CBU

4,725

3,952

5,291

12,183

12,112

16,828

ENU

3,130

3,084

3,613

8,410

4,294

7,081

TECH

3,256

3,624

4,177

10,406

12,885

15,916

MFG

2,385

2,439

2,391

6,916

6,065

8,327

COMM

1,444

1,044

1,578

4,006

3,411

4,396

Unallocated

1,360

1,044

976

3,124

1,981

3,142

Other Operating Income

-

50

-

749

2,798

4,344

Total of IT Services

27,732

26,507

29,094

80,760

74,426

102,503

IT Products

(140)

149

212

(398)

(954)

(1,047)

ISRE

(528)

(177)

(686)

(1,341)

(1,054)

(1,829)

Reconciling Items

169

256

48

320

172

283

Total

27,233

26,735

28,668

79,341

72,590

99,910

Finance Expense

(1,844)

(2,247)

(1,627)

(5,675)

(4,845)

(7,375)

Finance and Other Income

5,370

6,857

5,362

19,174

15,695

22,923

Share of net profit/ (loss) of associates accounted for using the equity method

34

(2)

7

16

(26)

(43)

Profit before tax

30,793

31,343

32,410

92,856

83,414

115,415

The Company is organized into the following operating segments: IT Services, IT Products and India State Run Enterprise segment (ISRE).

IT Services: The IT Services segment primarily consists of IT Service offerings to customers organized by industry verticals.

The industry verticals are as follows: Banking, Financial Services and Insurance (BFSI), Health Business unit (Health BU), Consumer Business unit (CBU), Energy, Natural Resources & Utilities (ENU), Manufacturing (MFG), Technology (TECH) and Communications (COMM). Key service offerings to customers includes software application development and maintenance, research and development services for hardware and software design, business application services, analytics, consulting, infrastructure outsourcing services and business process services.

IT Products: The Company is a value-added reseller of desktops, servers, notebooks, storage products, networking solutions and packaged software for leading international brands. In certain total outsourcing contracts of the IT Services segment, the Company delivers hardware, software products and other related deliverables. Revenue relating to the above items is reported as revenue from the sale of IT Products.

India State Run Enterprise segment (ISRE): This segment consists of IT Services offerings to entities/ departments owned or controlled by Government of India and/ or any State Governments

Reconciliation of Non-GAAP Constant Currency IT Services Revenue to IT Services Revenue as per IFRS ($MN)

Three Months ended December 31, 2019

 

IT Services Revenue as per IFRS

$

2,094.8

 

Effect of Foreign currency exchange movement

$

(9.1

)

Non-GAAP Constant Currency IT Services Revenue based on

$

2,085.7

 

previous quarter exchange rates

 

 

 

Three Months ended December 31, 2019

 

IT Services Revenue as per IFRS

$

2,094.8

 

Effect of Foreign currency exchange movement

$

8.4

 

Non-GAAP Constant Currency IT Services Revenue based on

$

2,103.2

 

exchange rates of comparable period in previous year

 

 

More news and information about Wipro Limited

Published By:

Business Wire: 14:39 GMT Tuesday 14th January 2020

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