Wipro Limited Announces Results for the Quarter and Year ended March 31, 2020 under IFRS

Wipro Limited Announces Results for the Quarter and Year ended March 31, 2020 under IFRS

IT Services Revenues2&3 in Constant Currency grew by 3.9% for the year

EPS for the year grew at 11.2% YOY
BANGALORE, India & EAST BRUNSWICK, N.J.–(BUSINESS WIRE)–#AI–Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for its quarter and year ended March 31, 2020.

Highlights of the Results

Results for the Year ended March 31, 2020:

Gross Revenue was Rs 610.2 billion ($8.1 billion1), an increase of 4.2% YoY

IT Services Segment Revenue was at $8,256.2 million, grew at 1.7% YoY

Non-GAAP2&3 constant currency IT Services Segment Revenue increased by 3.9% YoY

IT Services Operating Margin4 for the year was at 18.1%, an expansion of 0.2% YoY

Net Income for the year was Rs 97.2 billion ($1.3 billion1), an increase of 8.0% YoY

EPS for the year was Rs 16.67 ($0.221) per share and grew 11.2% YoY

Results for the Quarter ended March 31, 2020:

Gross Revenue was Rs 157.1 billion ($2.1 billion1), an increase of 4.7% YoY

IT Services Segment Revenue was at $2,073.7 million, a decrease of 1.0% QoQ

Non-GAAP3 constant currency IT Services Segment Revenue increased by 0.4% QoQ

IT Services Operating Margin4 for the quarter was at 17.6%, a decrease of 0.8% QoQ

Net Income for the quarter was Rs 23.3 billion ($308.5 million1), a decrease of 6.3% YoY

EPS for the quarter was Rs 4.09 ($0.051) per share, a decrease of 1.1% YoY

The Board has not recommended any final dividend. The interim dividend of Rs 1 declared by the Board at its meeting held on January 14, 2020 shall be considered as the final dividend for the financial year 2019-20. Thus, the total dividend for the financial year 2019-20 remains Rs 1 per equity share

Performance for the quarter & year ended March 31, 2020

Abidali Z. Neemuchwala, CEO and Managing Director said, “In these unprecedented times, I am extremely proud of how the Wipro team has come together and worked 24/7 to ensure the safety and well-being of each other while continuing to serve our clients. We hope that all of us stay safe and strong during these tough times. We are confident that our broad portfolio of services and our ability to execute to our commitments makes us well-positioned to gain market share.”

Jatin Dalal, Chief Financial Officer said, “The quarters ahead seem challenging and require a tremendous response on costs. We also anticipate our working capital to increase, but our strong balance sheet provides us the confidence that we will emerge stronger and better. Further, due to the volatility in the external environment, we have decided not to provide a quarterly guidance on revenues.”

We estimate that the IT Services Revenues for the quarter ended March 31, 2020 were negatively impacted by COVID-19 by approximately $14 -$16 million5 (0.7%-0.8% of revenues). Due to the uncertainty around the course of the COVID-19 pandemic, we do not have visibility into the extent to which it will disrupt our operations, and we have decided to not provide revenue guidance for the quarter ending June 30, 2020. We anticipate that we will resume providing revenue guidance when we have increased certainty of both demand and supply side factors.

IT Services

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

Wipro has won a multi-year engagement in Mexico with one of the world’s largest Spanish language media companies to redefine their workplace experience. This engagement enables their digital strategy to deliver enhanced user experience and move to a flexible and secure model leveraging VirtuaDesk™, Wipro’s digital IP, and security expertise. Wipro will also leverage its deep media expertise and innovation to enable the client in their long-term business objectives.

A large US-based healthcare company has awarded Wipro a multi-year contract to transform its contact center operations using Design Thinking, AI Automation & Analytics leveraging Wipro HOLMES™ and other digital technologies.

A multinational professional services firm has awarded Wipro a Digital Workspace Services contract under which Wipro will provide IT support and transform the end user experience for its employees globally, leveraging its design-led approach.

Wipro has won a multi-year engagement with a top Australian utility company for modernizing their core back-office platform leveraging SAP S/4 HANA digital core. This program will enable the client to consolidate and streamline their Corporate Finance, Supply Chain & Procurement functions in a single integrated platform.

Wipro continued to partner with our customers during COVID-19, some examples of how we collaborated are below:

Our customer, an American food service, facilities, and uniform services provider caters to over 5000 client locations across the US, majority of which are now inaccessible due to the COVID-19 pandemic. The company’s Chief Growth Officer collaborated with Wipro to map nursing homes in these locations that may be in dire need of help and which could be serviced by the local task teams. We successfully developed a Google Distance Matrix API based solution to map the top 10 service locations that could aid nursing homes in their serviceable regions. Especially for the New York state nursing homes that are more severely affected than most, we could provide same day location mapping results for priority outreach. This solution now has the ability to cover all nursing homes, enabling our customer to take its humanitarian effort nationwide.

One of the European governments recently announced multi-billion in loans for corporates to avail during the COVID-19 crisis. Within a span of 3 days, we helped our customer, one of the largest banks in Europe, update and go-live with their loan processing applications to ensure their corporate customers’ businesses stay up and running. These applications can now process interest-free loans in just 15 minutes, and so far, nearly 10,000 of the bank’s corporate customers have benefited immensely.

Amidst the COVID-19 crisis, we helped our customer, a Postal Services company in Middle East, launch a special medicine delivery service as a part of the government’s quick response for citizens.

Even amidst the operational issues posed by the pandemic, we were able to help our client, a clothing retailer in South Africa, successfully go-live with a large Oracle retail implementation. This is an example of a 100% ‘remote’ cutover, and has enabled the client to optimize its operations significantly to serve their customers.

Analyst Recognition

Wipro was recognized as the “Star Performer of the year” in Everest Group PEAK Matrix™ Service Provider of the Year awards

Wipro was positioned as a Leader in Gartner Magic Quadrant for Managed Workplace Services, Europe, David Groombridge, 25 Feb 2020

Wipro was named as a Leader in Gartner Magic Quadrant for Managed Workplace Services, North America, Daniel Barros, 25 Feb 2020

Wipro was positioned as a Leader in IDC MarketScape: Worldwide Business and Industrial IoT Consulting and Systems Integration Services 2020 Vendor Assessment. (Doc #US46120820, March 2020)

Wipro was positioned as a Leader in IDC MarketScape: Worldwide Business and Industrial IoT Engineering and Managed Services 2020 Vendor Assessment. (Doc #US46121220, March 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

IT Products

IT Products Segment Revenue for the year was Rs 11.0 billion ($146.0 million1)

IT Products Segment Results for the year was a loss of Rs 0.28 billion ($3.7 million1)

IT Products Segment Revenue for the quarter was Rs 2.8 billion ($37.0 million1)

IT Products Segment Results for the quarter was a profit of Rs 0.12 billion ($1.5 million1)

India business from State Run Enterprises (SRE)

India SRE Segment Revenue for the year was Rs 8.4 billion ($111.4 million1)

India SRE Segment Results for the year was a loss of Rs 1.8 billion ($24.2 million1)

India SRE Segment Revenue for the quarter was Rs 2.3 billion ($31.1 million1)

India SRE Segment Results for the quarter was a loss of Rs 0.48 billion ($6.4 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 table at the end provides 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 and year ended March 31, 2020, prepared under IFRS, along with individual business segment reports, are available in the Investors section of our website www.wipro.com

Quarterly Conference Call

We will hold an earnings conference call today at 07:15 p.m. Indian Standard Time (09:45 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- https://links.ccwebcast.com/?EventId=Wipro200415

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. The conditions caused by the COVID-19 pandemic could decrease technology spending, adversely affect demand for our

products, affect the rate of customer spending and could adversely affect our customers’ ability or willingness to purchase our offerings, delay prospective customers’ purchasing decisions, adversely impact our ability to provide on-site consulting services and our inability to deliver our customers or delay the provisioning of our offerings, all of which could adversely affect our future sales, operating results and overall financial performance. Our operations may also be negatively affected by a range of external factors related to the COVID-19 pandemic that are not within our control.

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 www.sec.gov. 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.

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 75.39, as published by the Federal Reserve Board of Governors on March 31, 2020. However, the realized exchange rate in our IT Services business segment for the quarter ended March 31, 2020 was US$1= Rs 73.95.

YoY growth rates for the year ended March 31, 2020 have been computed by adjusting revenues for the year ended March 31, 2019 for the impact of divestments.

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.

IT Services Operating Margin refers to Segment Results Total as reflected in IFRS financials.

The estimated impact of COVID-19 on our business is due to service discontinuity caused by inability of our employees to work from home or contract cancellations/ramp down attributed to the COVID-19 pandemic.

 

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 March 31, 2020

Convenience translation
into US dollar in millions
Refer footnote 1

ASSETS

 

Goodwill

 

116,980

131,012

1,738

Intangible assets

 

13,762

16,362

217

Property, plant and equipment

 

70,601

81,120

1,076

Right-of-use assets

 

16,748

222

Financial assets

 

Derivative assets

 

173

Investments

 

6,916

9,302

123

Trade receivables

 

4,373

6,049

80

Other financial assets

 

5,146

5,881

78

Investments accounted for using the equity method

 

1,235

1,383

18

Deferred tax assets

 

5,604

6,005

80

Non-current tax assets

 

20,603

11,414

151

Other non-current assets

 

15,872

11,935

158

Total non-current assets

 

261,265

297,211

3,941

Inventories

 

3,951

1,865

25

Financial assets

 

Derivative assets

 

4,931

3,025

40

Investments

 

220,716

189,635

2,515

Cash and cash equivalents

 

158,529

144,499

1,917

Trade receivables

 

100,489

104,474

1,386

Unbilled receivables

 

22,880

25,209

334

Other financial assets

 

14,611

8,614

114

Contract assets

 

15,038

17,143

227

Current tax assets

 

7,435

2,882

38

Other current assets

 

23,086

22,505

299

 

571,666

519,851

6,895

Assets held for sale

 

240

Total current assets

 

571,906

519,851

6,895

 

TOTAL ASSETS

 

833,171

817,062

10,836

 

EQUITY

 

Share capital

 

12,068

11,427

152

Securities premium reserve

 

533

1,275

17

Retained earnings

 

534,700

519,907

6,896

Share-based payment reserve

 

2,617

1,550

21

Other components of equity

 

18,198

23,299

309

Equity attributable to the equity holders of the Company

 

568,116

557,458

7,395

Non-controlling interest

 

2,637

1,875

25

TOTAL EQUITY

 

570,753

559,333

7,420

 

LIABILITIES

 

Financial liabilities

 

Long – term loans and borrowings

 

28,368

4,840

64

Derivative liabilities

 

138

Lease liabilities

 

12,638

168

Other financial liabilities

 

151

2

Deferred tax liabilities

 

3,417

2,825

37

Non-current tax liabilities

 

11,023

13,205

175

Other non-current liabilities

 

5,258

7,537

100

Provisions

 

2

2

Total non-current liabilities

 

48,068

41,336

546

Financial liabilities

 

Loans, borrowings and bank overdrafts

 

71,099

73,202

971

Derivative liabilities

 

1,310

7,231

96

Trade payables and accrued expenses

 

88,304

78,129

1,036

Lease liabilities

 

6,560

87

Other financial liabilities

 

644

899

12

Contract liabilities

 

24,768

18,775

249

Current tax liabilities

 

9,541

11,731

156

Other current liabilities

 

18,046

19,254

255

Provisions

 

638

612

8

Total current liabilities

 

214,350

216,393

2,870

TOTAL LIABILITIES

 

262,418

257,729

3,416

 

TOTAL EQUITY AND LIABILITIES

 

833,171

817,062

10,836

 

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 March 31,

Year ended March 31,

 

2019

2020

2020

2019

2020

2020

Convenience
translation into US
dollar in millions
Refer footnote 1

Convenience
translation into US
dollar in millions
Refer footnote 1

Revenues

 

150,063

157,110

2,084

585,845

610,232

8,094

Cost of revenues

 

(106,942)

(114,133)

(1,514)

(413,033)

(436,085)

(5,784)

Gross profit

 

43,121

42,977

570

172,812

174,147

2,310

 

Selling and marketing expenses

 

(10,994)

(10,295)

(137)

(44,510)

(42,907)

(569)

General and administrative expenses

 

(6,669)

(7,681)

(101)

(35,951)

(29,823)

(396)

Foreign exchange gains/(losses), net

 

316

993

13

3,215

3,169

42

Other operating income

 

1,546

395

5

4,344

1,144

15

Results from operating activities

 

27,320

26,389

350

99,910

105,730

1,402

 

Finance expenses

 

(2,530)

(1,653)

(22)

(7,375)

(7,328)

(97)

Finance and other income

 

7,228

4,907

65

22,923

24,081

319

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

 

(17)

13

(43)

29

Profit before tax

 

32,001

29,656

393

115,415

122,512

1,624

Income tax expense

 

(7,064)

(6,205)

(82)

(25,242)

(24,799)

(329)

Profit for the period

 

24,937

23,451

311

90,173

97,713

1,295

 

Profit attributable to:

 

Equity holders of the Company

 

24,833

23,260

308

90,031

97,218

1,288

Non-controlling interest

 

104

191

3

142

495

7

Profit for the period

 

24,937

23,451

311

90,173

97,713

1,295

 

Earnings per equity share:

 

Attributable to equity share holders of the Company

 

Basic

 

4.13

4.09

0.05

14.99

16.67

0.22

Diluted

 

4.12

4.07

0.05

14.95

16.62

0.22

 

Weighted average number of equity shares

 

used in computing earnings per equity share

 

Basic

 

6,008,783,491

5,692,835,298

5,692,835,298

6,007,376,837

5,833,384,018

5,833,384,018

Diluted

 

6,023,959,306

5,703,378,727

5,703,378,727

6,022,304,367

5,847,823,239

5,847,823,239

 

Additional Information:

Particulars

Three months ended

Year ended

March 31, 2020

December 31, 2019

March 31, 2019

March 31, 2020

March 31, 2019

Audited

Audited

Audited

Audited

Audited

Revenue

IT Services

BFSI

46,690

46,612

46,043

184,457

175,262

Health BU

20,589

19,799

19,288

78,240

75,081

CBU

25,669

25,443

23,667

97,008

89,313

ENU

19,570

19,553

18,628

76,443

72,830

TECH

19,503

18,584

18,402

75,895

76,591

MFG

12,486

12,450

11,551

48,158

46,496

COMM

8,453

8,565

8,286

33,840

32,680

Total of IT Services

152,960

151,006

145,865

594,041

568,253

IT Products

2,792

2,576

2,759

11,010

12,312

ISRE

2,341

1,847

1,787

8,400

8,544

Reconciling Items

10

3

(32)

(50)

(49)

Total Revenue

158,103

155,432

150,379

613,401

589,060

 

Other operating Income

IT Services

395

1,546

1,144

4,344

Total Other Operating Income

395

1,546

1,144

4,344

 

Segment Result

IT Services

BFSI

8,144

8,246

9,649

34,132

33,831

Health BU

3,049

3,186

1,940

12,027

8,638

CBU

4,546

4,725

4,716

16,729

16,828

ENU

3,766

3,130

2,787

12,176

7,081

TECH

3,906

3,256

3,031

14,312

15,916

MFG

2,336

2,385

2,262

9,252

8,327

COMM

1,330

1,444

985

5,336

4,396

Unallocated

(547)

1,360

1,161

2,577

3,142

Other Operating Income

395

1,546

1,144

4,344

Total of IT Services

26,925

27,732

28,077

107,685

102,503

IT Products

116

(140)

(93)

(282)

(1,047)

ISRE

(481)

(528)

(775)

(1,822)

(1,829)

Reconciling Items

(171)

169

111

149

283

Total

26,389

27,233

27,320

105,730

99,910

Finance Expense

(1,653)

(1,844)

(2,530)

(7,328)

(7,375)

Finance and Other Income

4,907

5,370

7,228

24,081

22,923

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

13

34

(17)

29

(43)

Profit before tax

29,656

30,793

32,001

122,512

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 segmContacts
Contact for Investor RelationsAparna Iyer
Phone: +91-9845540884
iyer.aparna@wipro.com

Abhishek Kumar Jain
Phone: +91-9845791363
abhishekkumar.jain@wipro.com

Contact for Media & PressVipin Nair
Phone: +91-80-3991 6450
vipin.nair1@wipro.com
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