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Wipro Limited Announces Results for the Quarter ended December 31, 2020 under IFRS

2021-01-13 08:08 ET - News Release

IT Services Revenue growth at 3.9% QoQ, highest in 36 quarters

Net Income for the quarter increased by 20.8% YoY


Company Website: http://www.wipro.com/
BANGALORE, India & EAST BRUNSWICK, N.J. -- (Business Wire)

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

  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 73.01, 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
  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

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 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

Source: Wipro Limited

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