13 Jan Wipro Limited Announces Results for the Quarter ended December 31, 2020 under IFRS
IT Services Revenue growth at 3.9% QoQ, highest in 36 quarters
Net Income for the quarter increased by 20.8% YoY
BANGALORE, India & EAST BRUNSWICK, N.J.–(BUSINESS WIRE)–#DevOps–Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for the quarter ended December 31, 2020.
Highlights of the Results
Results for the Quarter ended December 31, 2020:
Gross Revenue was Rs 156.7 billion ($2.1 billion1), an increase of 3.7% QoQ and 1.3% YoY
IT Services Segment Revenue was at $2,071 million, a sequential growth of 3.9%
Non-GAAP2 constant currency IT Services Segment Revenue increased by 3.4% QoQ
IT Services Operating Margin3 for the quarter was at 21.7%, an expansion of 243 bps QoQ and 329 bps YoY
Net Income for the quarter was Rs 29.7 billion ($406 million1), an increase of 20.8% YoY
Earnings Per Share for the quarter was at Rs 5.21 ($0.071), an increase of 20.7% YoY
Operating Cash Flow was at Rs 44.3 billion ($607 million1), which is 149.4% of Net Income
Wipro declared an interim dividend of Rs 1 ($0.0141) per equity share/ADS
Performance for the quarter ended December 31, 2020
Thierry Delaporte, CEO and Managing Director said, “Wipro has delivered a second consecutive quarter of strong performance on order booking, revenue and margins. Five of our sectors grew over 4% sequentially. We closed our largest ever deal win in Continental Europe. The demand environment is steadily improving, especially for digital transformation, digital operations, and cloud services. I am also pleased to share with you that we have moved into our new organization structure and are stabilizing quickly.”
Jatin Dalal, Chief Financial Officer said, “Our margins are now at a 22 quarters high. The expansion was led by improved revenue growth trajectory and excellence in operations with several metrics at an all-time high. Our Operating Cash Flows grew by 45% YoY with a significant improvement in outstanding receivables.”
Outlook for the quarter ending March 31, 2021
We expect Revenue from our IT Services business to be in the range of $2,102 million to $2,143 million*. This translates to a sequential growth of 1.5% to 3.5%.
* Outlook is based on the following exchange rates: GBP/USD at 1.33, Euro/USD at 1.20, AUD/USD at 0.73, USD/INR at 73.84 and CAD/USD at 0.76
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 73.01, as published by the Federal Reserve Board of Governors on December 31, 2020. However, the realized exchange rate in our IT Services business segment for the quarter ended December 31, 2020 was US$1= Rs 74.04
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
IT Services
Wipro continued its momentum in winning large deals with our customers as described below:
Wipro has secured a contract for the upstream and downstream business of a UK-based energy company to transform their existing application maintenance services to a DevOps model, aligned with their new digital organization. This will enable the client to be more agile and respond swiftly to the changing business demands while ensuring cost optimization.
Wipro has won an engagement with a global new-age technology corporation to provide B2B customer and technology support for their business communication platform. Wipro will also provide account review services to determine any unauthorized access, and offer Quality as a Service (QaaS) to the client.
Wipro has won an engagement with a US-based public relations and media services company to streamline its operations across US, Canada, UK, Europe, India, and APAC, in addition to consolidating its supplier base.
Wipro has secured a contract from a large US-based telecom service provider to manage their sales support and sales request functions for the order management process. As part of the engagement, Wipro will bring about technology transformation to reduce the cycle time for order processing, ensuring faster deployment of services.
A global energy corporation has awarded Wipro a multi-year contract to provide digital services. The engagement includes support and development of business and enterprise applications for the upstream, midstream and downstream lines of business and corporate functions of the company.
Digital & Cloud Application Services Highlights
We continue to see increasing traction in digital oriented deals as illustrated below:
A global beverage company has selected Designit, a Wipro company, to support a new product and service in the area of public and semi-public vending. Designit will analyze market and consumer insights and create vision concepts for the launch.
A US-based network software provider has awarded Wipro a contract to co-develop their 5G Radio Unit product and variants for global markets. The deal encompasses system architecture, software/hardware design, development, integration and validation to enable the customer achieve faster and cost-effective time-to-market.
A European multinational manufacturing company has awarded Wipro a contract to provide cloud managed services, application testing platforms and managed security services. Wipro will provide innovative solutions for Cloud access security, application security and vulnerability management using AI-based orchestration & automation.
Wipro’s crowdsourcing platform Topcoder has won an engagement with a leading US-based pharmaceutical company to provide on-demand digital talent and development capability to their R&D Data Science Team. As part of the engagement, Topcoder’s Platform and Data Science Community was leveraged to validate a COVID prediction model, operationalize it for use with customer data, and develop visualizations for the effort, all in under four weeks. The client had worked with Topcoder in June 2020 to plan for COVID vaccine trials.
Analyst Recognition
Wipro was positioned as a Leader in Gartner Magic Quadrant for Managed Network Services, Ted Corbett, Lisa Pierce, Danellie Young et al., 9 Nov 2020
Wipro was positioned as a Leader in IDC MarketScape Asia/Pacific Salesforce Implementation Services 2020 Vendor Assessment (Doc #AP46211420, Nov 2020)
Wipro was positioned as a Leader in IDC MarketScape Worldwide Life Science Sales and Marketing Digital Transformation 2020 Vendor Assessment (Doc #US42724918, Dec 2020)
Wipro was recognized as a Leader in IDC MarketScape GCC Professional Security Services 2020 Vendor Assessment (Doc #META47033220, Dec 2020)
Wipro was positioned as a Leader in IDC MarketScape Worldwide Retail Commerce Platform Service Providers 2020 Vendor Assessment (Doc #US46162920, Dec 2020)
Wipro was positioned as a Leader in Everest Group’s System Integrator (SI) Capabilities on Amazon Web Services (AWS), Microsoft Azure Services and Google Cloud Platform (GCP) Services PEAK Matrix® Assessments 2021
Wipro was recognized as a Leader and Star Performer in Everest Group’s Application and Digital Services (ADS) in Life and Annuities (L&A) Insurance PEAK Matrix® Assessment 2021
Wipro was recognized as a Leader in Everest Group’s Artificial Intelligence (AI) Services PEAK Matrix® Assessment 2021
Wipro Ranks #2 for Customer Satisfaction in Whitelane 2020 French IT Sourcing Study
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 quarter was Rs 1.6 billion ($21.3 million1)
IT Products Segment Results for the quarter was a profit of Rs 0.09billion ($1.2 million1)
India business from State Run Enterprises (ISRE)
India SRE Segment Revenue for the quarter was Rs 2.4 billion ($32.8 million1)
India SRE Segment Results for the quarter was a profit of Rs 0.47billion ($6.5 million1)
Please refer to 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 ended December 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 07:45 p.m. Indian Standard Time (09:15 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=WIPRO30121
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 180,000 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 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.
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, 2020
As at December 31, 2020
Convenience translation
into US dollar in millions
Refer footnote 1
ASSETS
Goodwill
131,012
136,322
1,867
Intangible assets
16,362
13,056
179
Property, plant and equipment
81,120
83,372
1,142
Right-of-Use assets
16,748
15,427
211
Financial assets
Derivative assets
–
51
1
Investments
9,302
8,679
119
Trade receivables
6,049
4,613
63
Other financial assets
5,881
6,657
91
Investments accounted for using the equity method
1,383
1,459
20
Deferred tax assets
6,005
1,690
23
Non-current tax assets
11,414
14,020
192
Other non-current assets
11,935
11,433
157
Total non-current assets
297,211
296,779
4,065
Inventories
1,865
1,205
17
Financial assets
Derivative assets
3,025
4,088
56
Investments
189,635
312,909
4,286
Cash and cash equivalents
144,499
139,435
1,910
Trade receivables
104,474
91,841
1,258
Unbilled receivables
25,209
23,105
316
Other financial assets
8,614
9,028
124
Contract assets
17,143
14,847
203
Current tax assets
2,882
2,354
32
Other current assets
22,505
22,144
303
Total current assets
519,851
620,956
8,505
TOTAL ASSETS
817,062
917,735
12,570
EQUITY
Share capital
11,427
11,431
157
Share premium
1,275
1,815
25
Retained earnings
476,103
424,275
5,811
Share-based payment reserve
1,550
1,765
24
SEZ Re-investment reserve
43,804
57,217
784
Other components of equity
23,299
30,647
420
Equity attributable to the equity holders of the Company
557,458
527,150
7,221
Non-controlling interest
1,875
1,489
20
TOTAL EQUITY
559,333
528,639
7,241
LIABILITIES
Financial liabilities
Loans and borrowings
4,840
213
3
Derivative liabilities
138
–
–
Lease liabilities
12,638
12,894
177
Other financial liabilities
151
929
13
Deferred tax liabilities
2,825
5,181
71
Non-current tax liabilities
13,205
12,442
170
Other non-current liabilities
7,537
7,803
107
Provisions
2
1
^
Total non-current liabilities
41,336
39,463
541
Financial liabilities
Loans, borrowings and bank overdrafts
73,202
73,256
1,003
Derivative liabilities
7,231
3,467
47
Trade payables and accrued expenses
78,129
83,461
1,143
Lease liabilities
6,560
7,502
103
Other financial liabilities
899
96,604
1,323
Contract liabilities
18,775
22,118
303
Current tax liabilities
11,731
15,913
218
Other current liabilities
19,254
46,627
639
Provisions
612
685
9
Total current liabilities
216,393
349,633
4,788
TOTAL LIABILITIES
257,729
389,096
5,329
TOTAL EQUITY AND LIABILITIES
817,062
917,735
12,570
^ Value is less than 1
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,
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
154,705
156,700
2,146
453,122
456,976
6,259
Cost of revenues
(109,673)
(104,313)
(1,429)
(321,952)
(313,400)
(4,293)
Gross profit
45,032
52,387
717
131,170
143,576
1,966
Selling and marketing expenses
(11,030)
(11,326)
(155)
(32,612)
(30,721)
(421)
General and administrative expenses
(7,496)
(7,814)
(107)
(22,142)
(25,997)
(356)
Foreign exchange gains
727
566
8
2,176
2,109
29
Other operating income/(loss), net
–
–
–
749
(81)
(1)
Results from operating activities
27,233
33,813
463
79,341
88,886
1,217
Finance expenses
(1,844)
(1,400)
(19)
(5,675)
(3,966)
(54)
Finance and other income
5,370
5,975
82
19,174
16,465
226
Share of net profit /(loss) of associates accounted for using the equity method
34
101
1
16
126
2
Profit before tax
30,793
38,489
527
92,856
101,511
1,391
Income tax expense
(6,164)
(8,524)
(117)
(18,594)
(22,590)
(309)
Profit for the period
24,629
29,965
410
74,262
78,921
1,082
Profit attributable to:
Equity holders of the Company
24,558
29,667
406
73,958
78,225
1,072
Non-controlling interest
71
298
4
304
696
10
Profit for the period
24,629
29,965
410
74,262
78,921
1,082
Earnings per equity share:
Attributable to equity holders of the Company
Basic
4.31
5.21
0.07
12.58
13.74
0.19
Diluted
4.30
5.17
0.07
12.55
13.46
0.18
Weighted average number of equity shares
used in computing earnings per equity share
Basic
5,692,132,118
5,696,798,493
5,696,798,493
5,879,588,157
5,694,731,405
5,694,731,405
Diluted
5,703,265,041
5,741,070,466
5,741,070,466
5,892,966,906
5,812,779,105
5,812,779,105
Additional Information:
Particulars
Three months ended
Nine months ended
Year ended
December
31, 2020
September
30, 2020
December
31, 2019
December
31, 2020
December
31, 2019
March
31, 2020
Audited
Audited
Audited
Audited
Audited
Audited
Revenue
IT Services
BFSI
46,825
45,995
46,612
137,648
137,767
184,457
Health BU
21,266
20,294
19,799
61,320
57,651
78,240
CBU
25,077
23,927
25,443
72,183
71,339
97,008
ENU
20,076
18,990
19,553
58,345
56,873
76,443
TECH
19,394
18,478
18,584
57,542
56,392
75,895
MFG
12,677
12,175
12,450
36,672
35,672
48,158
COMM
8,016
7,822
8,565
23,258
25,387
33,840
Total of IT Services
153,331
147,681
151,006
446,968
441,081
594,041
IT Products
1,552
1,691
2,576
5,501
8,218
11,010
ISRE
2,393
2,119
1,847
6,629
6,059
8,400
Reconciling Items
(10)
(8)
3
(13)
(60)
(50)
Total Revenue
157,266
151,483
155,432
459,085
455,298
613,401
Other operating income/(loss), net
IT Services
–
(178)
–
(81)
749
1,144
Total Other operating income/(loss), net
–
(178)
–
(81)
749
1,144
Segment Result
IT Services
BFSI
9,820
9,209
8,246
27,546
25,988
34,132
Health BU
4,359
4,005
3,186
11,092
8,978
12,027
CBU
6,166
5,507
4,725
16,092
12,183
16,729
ENU
3,688
3,329
3,130
10,586
8,410
12,176
TECH
3,128
2,632
3,256
9,927
10,406
14,312
MFG
2,552
2,379
2,385
7,159
6,916
9,252
COMM
1,445
1,320
1,444
3,656
4,006
5,336
Unallocated
2,046
148
1,360
3,400
3,124
2,577
Other operating income/(loss), net
–
(178)
–
(81)
749
1,144
Total of IT Services
33,204
28,351
27,732
89,377
80,760
107,685
IT Products
89
(300)
(140)
(87)
(398)
(282)
ISRE
473
114
(528)
487
(1,341)
(1,822)
Reconciling Items
47
(30)
169
(891)
320
149
Total
33,813
28,135
27,233
88,886
79,341
105,730
Finance Expense
(1,400)
(1,267)
(1,844)
(3,966)
(5,675)
(7,328)
Finance and Other Income
5,975
5,209
5,370
16,465
19,174
24,081
Share of net profit/ (loss) of associates accounted for using the equity method
101
(6)
34
126
16
29
Profit before tax
38,489
32,071
30,793
101,511
92,856
122,512
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 the 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, 2020
IT Services Revenue as per IFRS
$
2,071.0
Effect of Foreign currency exchange movement
$
(11.8
)
Non-GAAP Constant Currency IT Services Revenue based on
$
2,059.2
previous quarter exchange rates
Three Months ended December 31, 2020
IT Services Revenue as per IFRS
$
2,071.0
Effect of Foreign currency exchange movement
$
(17.9
)
Non-GAAP Constant Currency IT Services Revenue based on
$
2,053.1
exchange rates of comparable period in previous year
Contacts
Contact for Investor RelationsAparna Iyer
Phone: +91-80-6142 7139
[email protected] Kumar Jain
Phone: +91-9845791363
[email protected] for Media & Press
Vipin Nair
Phone: +91-80-6142 6450
[email protected]
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