13 Oct Wipro Limited Announces Results for the Quarter Ended September 30, 2020 Under IFRS
IT Services Revenue for the quarter grew by 3.7% QoQ
Board approves buy back of Rs 95 billion
BANGALORE, India & EAST BRUNSWICK, N.J.–(BUSINESS WIRE)–#IFRS–Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for the quarter ended September 30, 2020.
Highlights of the Results
Results for the Quarter ended September 30, 2020:
Gross Revenue was Rs 151.1 billion ($2.1 billion1), an increase of 1.4% QoQ and a decrease of 0.1% YoY
IT Services Segment Revenue was at $1,992.4 million, an increase of 3.7% QoQ
Non-GAAP2 constant currency IT Services Segment Revenue increased by 2.0% QoQ
IT Services Operating Margin3 for the quarter was at 19.2%, an expansion of 0.2% QoQ and 1.1%YoY
Net Income for the quarter was Rs 24.7 billion ($335.3 million1), a decrease of 3.4% YoY
Earnings Per Share for the quarter was at Rs 4.33 ($0.061), an increase of 0.7% YoY
Operating Cash Flow was at Rs 44.1 billion ($600.1 million1), which is 179.0% of Net Income
Performance for the quarter ended September 30, 2020
Thierry Delaporte, CEO and Managing Director said, “We had an excellent quarter with growth in revenues, expansion of margins and robust cash generation. I am very excited about the opportunities that are ahead of us and encouraged by the acceleration in business momentum we have seen this quarter. Our strategy is to focus on growth in prioritized sectors & markets led by vertical solution offerings.”
Jatin Dalal, Chief Financial Officer said, “It was another quarter of strong performance on margins and cash flows. We improved on several operating parameters to deliver margin expansion of 0.2% to 19.2% in the IT Services segment. Our Free Cash Flows as a percentage of Net Income for the first half was at 160.7% of Net income. The announcement to buyback equity shares is part of our philosophy to deliver consistent returns to shareholders.”
Outlook for the quarter ending December 31, 2020
We expect Revenue from our IT Services business to be in the range of $2,022 million to $2,062 million*. This translates to a sequential growth of 1.5% to 3.5%.
* Outlook is based on the following exchange rates: GBP/USD at 1.31, Euro/USD at 1.18, AUD/USD at 0.72, USD/INR at 73.84 and CAD/USD at 0.75
Capital Allocation
The Board of Directors approved a buyback proposal, subject to the approval of shareholders through postal ballot, for purchase by the company of up to 237.5 million equity shares of Rs 2 each (representing 4.16% of total paid up equity capital) from the shareholders of the company on a proportionate basis by way of a tender offer. The buyback price is Rs 400 ($5.41) per equity share payable in cash for an aggregate amount not exceeding Rs 95 billion ($1.3 billion1).
IT Services
Wipro continued its momentum in winning large deals with our customers as described below:
A US-based multinational food manufacturing company has selected Wipro as the sole strategic partner for application support and maintenance globally. As part of the engagement, Wipro will simplify and transform the client’s application portfolio and help them develop new digital capabilities by leveraging cutting-edge technology solutions. In addition, Wipro will also drive end-to-end enterprise resource planning by rolling out SAP ECC for their acquired entity in Latin America to enable greater integration with the parent company.
Wipro has won a multi-year, multi-million-dollar contract from a large US-based healthcare payer to provide enrollment and billing services for individual health plans under the Affordable Care Act, leveraging Wipro’s digital platform and digital operations services.
Wipro has secured a contract from a leading US-based healthcare technology company to transform its healthcare system by providing application development and support, quality engineering, and production engineering services.
Wipro has won a strategic, multi-year managed services contract from a leading US-based manufacturing company to transform its entire procure to pay operations, leveraging Wipro HOLMES® solutions such as Intelligent Document Processing (IDP), Contract Intelligence and Order digitization.
Digital & Cloud Application Services Highlights
We continue to see increasing traction in digital oriented deals as illustrated below:
Wipro has been awarded a multi-year contract as a transformation partner for Cynergy Bank, a UK Bank specialised in serving the financial needs of property and commercial business owners. Wipro will leverage its core capabilities, IP, partnerships, Wipro ventures and best practices to comprehensively manage and transform the Bank’s IT Infrastructure and Security operations as part of this IT co-source engagement. Wipro has also been chosen as the prime partner to deliver digital transformation at the Bank, thereby realising the Bank’s future vision and architectural roadmap leveraging Wipro Digital, Designit, Topcoder and NewAgeEcosystem.
Wipro and Designit have been selected by a regional water authority in Asia Pacific to transform their customer experience, workflow, case management and IoT analytics platforms. The integrated solution, built on Microsoft Azure, will provide a common platform for data acquisition and visualization, device management, and interface with other IT and third party agencies/ systems. It will also support new IoT devices to implement various dam safety and water monitoring measures.
A leading semiconductor manufacturer has awarded Wipro a turnkey silicon development contract for its 5G wireless infrastructure and Automotive Vehicle-to-everything (V2X) market. Wipro’s strong expertise in very large-scale integration (VLSI) and firmware domain will help the customer develop variants of the product for different market segments and accelerate their time-to-market.
A global bank has chosen Designit, a Wipro company, to support a new startup business focused on small and medium-sized enterprises leveraging strategic design, logistics & operations management, data analysis, and growth strategy consultancy services.
Partner and Analyst Recognition
Wipro has been positioned as a Leader in The Forrester New Wave™: RPA Service Providers in Healthcare, Q3 2020
Wipro is a Leader in Everest Group PEAK Matrix® Assessments for Banking BPS, Cloud-Native Application Development Services, Finance and Accounting Outsourcing (FAO) 2020
Wipro is named a Leader and Star Performer in Everest Group’s PEAK Matrix® Assessments on Digital Workplace Services, Data and Analytics Services 2020
Wipro has been positioned a leader in IDC MarketScape: Worldwide Managed Security Services 2020 Vendor Assessment (Doc # US46235320 – Sep 2020)
Wipro has been positioned a Leader in IDC MarketScape: Worldwide Customer Experience Improvement Services 2020 Vendor Assessment (Doc # US45658220 – Sep 2020)
Wipro has been positioned as a Leader in IDC MarketScape: Worldwide Manufacturing Intelligence Transformation 2020 Vendor Assessment (Doc # US46844820 – Sep 2020)
Wipro is rated as a Leader in ISG Provider Lens™ SAP HANA and Leonardo Ecosystem Partners quadrant report for the U.K. and U.S. 2020, in multiple quadrants.
Wipro is rated as a Leader in ISG Provider Lens™ Microsoft Ecosystem U.S. 2020
Wipro was named as a Leader in Gartner Magic Quadrant for Data Center Outsourcing and Hybrid Infrastructure Managed Services, North America, Mark Ray et al., 9 Jun 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.
State of Intelligent Enterprises Report
A Wipro study finds 95% of business leaders consider AI critical, yet only 17% leverage it across their organization. The ‘State of Intelligent Enterprises’ report examines the current landscape and shows the challenges and the driving factors for businesses to become truly intelligent enterprises.
IT Products
IT Products Segment Revenue for the quarter was Rs 1.7 billion ($23.0 million1)
IT Products Segment Results for the quarter was a loss of Rs 0.3 billion ($4.1 million1)
India business from State Run Enterprises (ISRE)
India SRE Segment Revenue for the quarter was Rs 2.1 billion ($28.8 million1)
India SRE Segment Results for the quarter was a profit of Rs 0.1 billion ($1.6 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 September 30, 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=WIPRO1310
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.
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 73.54, as published by the Federal Reserve Board of Governors on September 30, 2020. However, the realized exchange rate in our IT Services business segment for the quarter ended September 30, 2020 was US$1= Rs 74.12
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
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 September 30, 2020
Convenience translation
into US dollar in millions
Refer footnote 1
ASSETS
Goodwill
131,012
135,137
1,838
Intangible assets
16,362
15,347
209
Property, plant and equipment
81,120
81,984
1,115
Right-of-Use assets
16,748
14,943
203
Financial assets
Derivative assets
–
14
^
Investments
9,302
8,363
114
Trade receivables
6,049
6,011
82
Other financial assets
5,881
6,720
91
Investments accounted for using the equity method
1,383
1,374
19
Deferred tax assets
6,005
1,437
20
Non-current tax assets
11,414
13,446
183
Other non-current assets
11,935
11,192
152
Total non-current assets
297,211
295,968
4,026
Inventories
1,865
1,311
18
Financial assets
Derivative assets
3,025
3,200
44
Investments
189,635
258,129
3,510
Cash and cash equivalents
144,499
152,423
2,073
Trade receivables
104,474
89,541
1,217
Unbilled receivables
25,209
23,884
324
Other financial assets
8,614
10,893
148
Contract assets
17,143
15,492
211
Current tax assets
2,882
2,294
31
Other current assets
22,505
22,080
300
Total current assets
519,851
579,247
7,876
TOTAL ASSETS
817,062
875,215
11,902
EQUITY
Share capital
11,427
11,430
155
Share premium
1,275
1,711
23
Retained earnings
476,103
517,217
7,033
Share-based payment reserve
1,550
1,747
24
SEZ Re-investment reserve
43,804
51,437
699
Other components of equity
23,299
29,008
395
Equity attributable to the equity holders of the Company
557,458
612,550
8,329
Non-controlling interest
1,875
1,201
16
TOTAL EQUITY
559,333
613,751
8,345
LIABILITIES
Financial liabilities
Loans and borrowings
4,840
225
3
Derivative liabilities
138
13
^
Lease liabilities
12,638
12,320
168
Other financial liabilities
151
657
9
Deferred tax liabilities
2,825
3,067
42
Non-current tax liabilities
13,205
12,186
166
Other non-current liabilities
7,537
7,320
100
Provisions
2
1
^
Total non-current liabilities
41,336
35,789
488
Financial liabilities
Loans, borrowings and bank overdrafts
73,202
74,293
1,010
Derivative liabilities
7,231
1,732
24
Trade payables and accrued expenses
78,129
82,023
1,115
Lease liabilities
6,560
7,286
99
Other financial liabilities
899
1,151
16
Contract liabilities
18,775
19,427
264
Current tax liabilities
11,731
14,531
198
Other current liabilities
19,254
24,445
332
Provisions
612
787
11
Total current liabilities
216,393
225,675
3,069
TOTAL LIABILITIES
257,729
261,464
3,557
TOTAL EQUITY AND LIABILITIES
817,062
875,215
11,902
^ 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 September 30,
Six months ended September 30,
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
151,256
151,145
2,055
298,417
300,276
4,083
Cost of revenues
(108,006
)
(105,387
)
(1,433
)
(212,279
)
(209,087
)
(2,843
)
Gross profit
43,250
45,758
622
86,138
91,189
1,240
Selling and marketing expenses
(10,629
)
(9,606
)
(132
)
(21,582
)
(19,395
)
(264
)
General and administrative expenses
(6,527
)
(8,177
)
(111
)
(14,646
)
(18,183
)
(247
)
Foreign exchange gains
591
338
5
1,449
1,543
21
Other operating income/(loss), net
50
(178
)
(2
)
749
(81
)
(1
)
Results from operating activities
26,735
28,135
382
52,108
55,073
749
Finance expenses
(2,247
)
(1,267
)
(17
)
(3,831
)
(2,566
)
(35
)
Finance and other income
6,857
5,209
71
13,804
10,490
143
Share of net profit /(loss) of associates accounted for using the equity method
(2
)
(6
)
^
(18
)
25
^
Profit before tax
31,343
32,071
436
62,063
63,022
857
Income tax expense
(5,731
)
(7,228
)
(98
)
(12,430
)
(14,066
)
(191
)
Profit for the period
25,612
24,843
338
49,633
48,956
666
Profit attributable to:
Equity holders of the Company
25,526
24,656
335
49,400
48,558
661
Non-controlling interest
86
187
3
233
398
5
Profit for the period
25,612
24,843
338
49,633
48,956
666
Earnings per equity share:
Attributable to equity holders of the Company
Basic
4.30
4.33
0.06
8.27
8.53
0.12
Diluted
4.29
4.32
0.06
8.25
8.51
0.12
Weighted average number of equity shares
used in computing earnings per equity share
Basic
5,936,393,069
5,694,035,551
5,694,035,551
5,975,454,269
5,693,689,502
5,693,689,502
Diluted
5,948,113,661
5,706,874,339
5,706,874,339
5,986,683,086
5,705,850,555
5,705,850,555
^ Value is less than 1
Additional Information:
Particulars
Three months ended
Six months ended
Year ended
September
30, 2020
June
30, 2020
September
30, 2019
September
30, 2020
September
30, 2019
March
31, 2020
Audited
Audited
Audited
Audited
Audited
Audited
Revenue
IT Services
BFSI
45,995
44,828
45,760
90,823
91,155
184,457
Health BU
20,294
19,760
18,981
40,054
37,852
78,240
CBU
23,927
23,179
23,530
47,106
45,896
97,008
ENU
18,990
19,279
18,888
38,269
37,320
76,443
TECH
18,478
19,670
19,148
38,148
37,808
75,895
MFG
12,175
11,820
11,886
23,995
23,222
48,158
COMM
7,822
7,420
8,368
15,242
16,822
33,840
Total of IT Services
147,681
145,956
146,561
293,637
290,075
594,041
IT Products
1,691
2,258
3,233
3,949
5,642
11,010
ISRE
2,119
2,117
2,069
4,236
4,212
8,400
Reconciling Items
(8
)
5
(16
)
(3
)
(63
)
(50
)
Total Revenue
151,483
150,336
151,847
301,819
299,866
613,401
Other operating income/(loss), net
IT Services
(178
)
97
50
(81
)
749
1,144
Total Other operating income/(loss), net
(178
)
97
50
(81
)
749
1,144
Segment Result
IT Services
BFSI
9,209
8,517
8,407
17,726
17,742
34,132
Health BU
4,005
2,728
2,863
6,733
5,792
12,027
CBU
5,507
4,419
3,952
9,926
7,458
16,729
ENU
3,329
3,569
3,084
6,898
5,280
12,176
TECH
2,632
4,167
3,624
6,799
7,150
14,312
MFG
2,379
2,228
2,439
4,607
4,531
9,252
COMM
1,320
891
1,044
2,211
2,562
5,336
Unallocated
148
1,206
1,044
1,354
1,764
2,577
Other operating income/(loss), net
(178
)
97
50
(81
)
749
1,144
Total of IT Services
28,351
27,822
26,507
56,173
53,028
107,685
IT Products
(300
)
124
149
(176
)
(258
)
(282
)
ISRE
114
(100
)
(177
)
14
(813
)
(1,822
)
Reconciling Items
(30
)
(908
)
256
(938
)
151
149
Total
28,135
26,938
26,735
55,073
52,108
105,730
Finance Expense
(1,267
)
(1,299
)
(2,247
)
(2,566
)
(3,831
)
(7,328
)
Finance and Other Income
5,209
5,281
6,857
10,490
13,804
24,081
Share of net profit/ (loss) of associates accounted for using the equity method
(6
)
31
(2
)
25
(18
)
29
Profit before tax
32,071
30,951
31,343
63,022
62,063
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 September 30, 2020
IT Services Revenue as per IFRS
$
1992.4
Effect of Foreign currency exchange movement
$
(32.9
)
Non-GAAP Constant Currency IT Services Revenue based on
$
1959.5
previous quarter exchange rates
Three Months ended September 30, 2020
IT Services Revenue as per IFRS
$
1992.4
Effect of Foreign currency exchange movement
$
(12.9
)
Non-GAAP Constant Currency IT Services Revenue based on
$
1979.5
exchange rates of comparable period in previous year
Contacts
Contact for Investor RelationsAparna Iyer
Phone: +91-80-6142 7139
[email protected]
Abhishek Kumar Jain
Phone: +91-9845791363
[email protected]
Contact for Media & PressVipin Nair
Phone: +91-80-6142 6450
[email protected]
Read full story here
Sorry, the comment form is closed at this time.