15 Apr 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
[email protected]
Abhishek Kumar Jain
Phone: +91-9845791363
[email protected]
Contact for Media & PressVipin Nair
Phone: +91-80-3991 6450
[email protected]
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