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.

  1. For the convenience of the readers, the amounts in Indian Rupees in this release have been translated into United States Dollars at the certified foreign exchange rate of US$1 = Rs 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
  2. Constant currency revenue for a period is the product of volumes in that period times the average actual exchange rate of the corresponding comparative period
  3. IT Services Operating Margin refers to Segment Results Total as reflected in IFRS financials

WIPRO LIMITED AND SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

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

 

As at March 31, 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 Relations
Aparna Iyer

Phone: +91-80-6142 7139

iyer.aparna@wipro.com

Abhishek Kumar Jain

Phone: +91-9845791363

abhishekkumar.jain@wipro.com

Contact for Media & Press
Vipin Nair

Phone: +91-80-6142 6450

vipin.nair1@wipro.com

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Author: dmnnewswire