IT Services Operating Margin3 for the quarter was at 19.0%
Earnings Per Share up by 5.7% YoY
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 June 30, 2020.
Highlights of the Results
Results for the Quarter ended June 30, 2020:
Performance for the quarter ended June 30, 2020
Thierry Delaporte, CEO and Managing Director said, “I am deeply honored to lead Wipro, an extraordinary company and an exemplary corporate citizen with a deep technology heritage built on a strong foundation of values. I have great respect for the work done by the Azim Premji Foundation, its 67% economic ownership of Wipro adds greater meaning to what we do. Profitable growth will be the most important priority on my agenda. I am confident that we will be able to deliver long-term, sustainable growth in the interest of all our stakeholders.”
Jatin Dalal, Chief Financial Officer said, “We expanded the margins during the quarter, despite lower revenues, on the back of solid execution of several operational improvements and rupee depreciation. We also continued to sustain robust cash generation with Operating Cash Flows at 174.9% of Net income.”
IT Services
Wipro continued its momentum in winning large deals with our customers as described below:
Digital & Cloud Application Services Highlights
We continue to see increasing traction in digital oriented deals as illustrated below:
Partner and Analyst Recognition
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State of IT Infrastructure 2020 Report
Wipro released its ‘State of IT Infrastructure 2020’ report which provides a multi-dimensional view of how the COVID-19 pandemic will impact IT infrastructure trends in the immediate future
IT Products
India business from State Run Enterprises (SRE)
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 June 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 06:45 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=WIP200714
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. The conditions caused by the COVID-19 pandemic could decrease technology spending, adversely affect demand for our products, affect the rate of customer spending and could adversely affect our customers’ ability or willingness to purchase our offerings, delay prospective customers’ purchasing decisions, adversely impact our ability to provide on-site consulting services and our inability to deliver our customers or delay the provisioning of our offerings, all of which could adversely affect our future sales, operating results and overall financial performance. Our operations may also be negatively affected by a range of external factors related to the COVID-19 pandemic that are not within our control.
Additional risks that could affect our future operating results are more fully described in our filings with the United States Securities and Exchange Commission, including, but not limited to, Annual Reports on Form 20-F. These filings are available at www.sec.gov. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company’s filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf.
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 June 30, 2020 | |||||
Convenience translation | |||||||
ASSETS |
| ||||||
Goodwill |
| 131,012 | 131,596 | 1,742 | |||
Intangible assets |
| 16,362 | 15,501 | 205 | |||
Property, plant and equipment |
| 81,120 | 81,843 | 1,084 | |||
Right-of-Use assets |
| 16,748 | 16,018 | 212 | |||
Financial assets |
| ||||||
Investments |
| 9,302 | 8,875 | 118 | |||
Trade receivables |
| 6,049 | 6,047 | 80 | |||
Other financial assets |
| 5,881 | 6,354 | 84 | |||
Investments accounted for using the equity method |
| 1,383 | 1,412 | 19 | |||
Deferred tax assets |
| 6,005 | 3,073 | 41 | |||
Non-current tax assets |
| 11,414 | 11,821 | 157 | |||
Other non-current assets |
| 11,935 | 11,457 | 152 | |||
Total non-current assets |
| 297,211 | 293,997 | 3,894 | |||
Inventories |
| 1,865 | 1,644 | 22 | |||
Financial assets |
| ||||||
Derivative assets |
| 3,025 | 1,666 | 22 | |||
Investments |
| 189,635 | 213,865 | 2,832 | |||
Cash and cash equivalents |
| 144,499 | 159,443 | 2,111 | |||
Trade receivables |
| 104,474 | 93,023 | 1,232 | |||
Unbilled receivables |
| 25,209 | 24,659 | 326 | |||
Other financial assets |
| 8,614 | 10,526 | 139 | |||
Contract assets |
| 17,143 | 16,301 | 216 | |||
Current tax assets |
| 2,882 | 2,400 | 32 | |||
Other current assets |
| 22,505 | 23,584 | 312 | |||
Total current assets |
| 519,851 | 547,111 | 7,244 | |||
| |||||||
TOTAL ASSETS |
| 817,062 | 841,108 | 11,138 | |||
| |||||||
EQUITY |
| ||||||
Share capital |
| 11,427 | 11,429 | 151 | |||
Share premium |
| 1,275 | 1,568 | 21 | |||
Retained earnings |
| 476,103 | 494,659 | 6,549 | |||
Share-based payment reserve |
| 1,550 | 1,512 | 20 | |||
SEZ Re-investment reserve |
| 43,804 | 49,234 | 652 | |||
Other components of equity |
| 23,299 | 28,352 | 375 | |||
Equity attributable to the equity holders of the Company |
| 557,458 | 586,754 | 7,768 | |||
Non-controlling interest |
| 1,875 | 1,062 | 14 | |||
TOTAL EQUITY |
| 559,333 | 587,816 | 7,782 | |||
| |||||||
LIABILITIES |
| ||||||
Financial liabilities |
| ||||||
Long – term loans and borrowings |
| 4,840 | 4,747 | 63 | |||
Derivative liabilities |
| 138 | 85 | 1 | |||
Lease liabilities |
| 12,638 | 12,744 | 169 | |||
Other financial liabilities |
| 151 | 192 | 3 | |||
Deferred tax liabilities |
| 2,825 | 2,261 | 30 | |||
Non-current tax liabilities |
| 13,205 | 13,060 | 173 | |||
Other non-current liabilities |
| 7,537 | 8,293 | 110 | |||
Provisions |
| 2 | 4 | ^ | |||
Total non-current liabilities |
| 41,336 | 41,386 | 549 | |||
Financial liabilities |
| ||||||
Loans, borrowings and bank overdrafts |
| 73,202 | 69,490 | 920 | |||
Derivative liabilities |
| 7,231 | 2,740 | 36 | |||
Trade payables and accrued expenses |
| 78,129 | 75,057 | 995 | |||
Lease liabilities |
| 6,560 | 7,080 | 94 | |||
Other financial liabilities |
| 899 | 885 | 12 | |||
Contract liabilities |
| 18,775 | 18,279 | 242 | |||
Current tax liabilities |
| 11,731 | 13,970 | 185 | |||
Other current liabilities |
| 19,254 | 23,546 | 312 | |||
Provisions |
| 612 | 859 | 11 | |||
Total current liabilities |
| 216,393 | 211,906 | 2,807 | |||
TOTAL LIABILITIES |
| 257,729 | 253,292 | 3,356 | |||
| |||||||
TOTAL EQUITY AND LIABILITIES |
| 817,062 | 841,108 | 11,138 | |||
^ 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 June 30, | ||||||
| 2019 | 2020 | 2020 | |||
|
Convenience translation | |||||
Revenues |
| 147,161 | 149,131 | 1,974 | ||
Cost of revenues |
| (104,273) | (103,700) | (1,373) | ||
Gross profit |
| 42,888 | 45,431 | 601 | ||
| ||||||
Selling and marketing expenses |
| (10,953) | (9,789) | (130) | ||
General and administrative expenses |
| (8,119) | (10,006) | (132) | ||
Foreign exchange gains/(losses), net |
| 858 | 1,205 | 16 | ||
Other operating income |
| 699 | 97 | 1 | ||
Results from operating activities |
| 25,373 | 26,938 | 356 | ||
| ||||||
Finance expenses |
| (1,584) | (1,299) | (17) | ||
Finance and other income |
| 6,947 | 5,281 | 70 | ||
Share of net profit /(loss) of associates accounted for using the equity method |
| (16) | 31 | ^ | ||
Profit before tax |
| 30,720 | 30,951 | 409 | ||
Income tax expense |
| (6,699) | (6,838) | (91) | ||
Profit for the period |
| 24,021 | 24,113 | 318 | ||
| ||||||
Profit attributable to: |
| |||||
Equity holders of the Company |
| 23,874 | 23,902 | 315 | ||
Non-controlling interest |
| 147 | 211 | 3 | ||
Profit for the period |
| 24,021 | 24,113 | 318 | ||
| ||||||
Earnings per equity share: |
| |||||
Attributable to equity holders of the Company |
| |||||
Basic |
| 3.97 | 4.20 | 0.06 | ||
Diluted |
| 3.96 | 4.19 | 0.06 | ||
| ||||||
Weighted average number of equity shares |
| |||||
used in computing earnings per equity share |
| |||||
Basic |
| 6,010,597,369 | 5,693,348,171 | 5,693,348,171 | ||
Diluted |
| 6,025,352,442 | 5,703,168,248 | 5,703,168,248 | ||
^ Value is less than 1 |
| |||||
Additional Information:
Particulars | Three months ended | Year ended | ||
June 30, |
March 31, |
June 30, |
March 31, | |
Audited | Audited | Audited | Audited | |
Revenue | ||||
IT Services | ||||
BFSI | 44,828 | 46,690 | 45,395 | 184,457 |
Health BU | 19,760 | 20,589 | 18,871 | 78,240 |
CBU | 23,179 | 25,669 | 22,366 | 97,008 |
ENU | 19,279 | 19,570 | 18,432 | 76,443 |
TECH | 19,670 | 19,503 | 18,660 | 75,895 |
MFG | 11,820 | 12,486 | 11,336 | 48,158 |
COMM | 7,420 | 8,453 | 8,454 | 33,840 |
Total of IT Services | 145,956 | 152,960 | 143,514 | 594,041 |
IT Products | 2,258 | 2,792 | 2,409 | 11,010 |
ISRE | 2,117 | 2,341 | 2,143 | 8,400 |
Reconciling Items | 5 | 10 | (47) | (50) |
Total Revenue | 150,336 | 158,103 | 148,019 | 613,401 |
Other operating Income | ||||
IT Services | 97 | 395 | 699 | 1,144 |
Total Other Operating Income | 97 | 395 | 699 | 1,144 |
Segment Result | ||||
IT Services | ||||
BFSI | 8,517 | 8,144 | 9,335 | 34,132 |
Health BU | 2,728 | 3,049 | 2,929 | 12,027 |
CBU | 4,419 | 4,546 | 3,506 | 16,729 |
ENU | 3,569 | 3,766 | 2,196 | 12,176 |
TECH | 4,167 | 3,906 | 3,526 | 14,312 |
MFG | 2,228 | 2,336 | 2,092 | 9,252 |
COMM | 891 | 1,330 | 1,518 | 5,336 |
Unallocated | 1,206 | (547) | 720 | 2,577 |
Other Operating Income | 97 | 395 | 699 | 1,144 |
Total of IT Services | 27,822 | 26,925 | 26,521 | 107,685 |
IT Products | 124 | 116 | (407) | (282) |
ISRE | (100) | (481) | (636) | (1,822) |
Reconciling Items | (908) | (171) | (105) | 149 |
Total | 26,938 | 26,389 | 25,373 | 105,730 |
Finance Expense | (1,299) | (1,653) | (1,584) | (7,328) |
Finance and Other Income | 5,281 | 4,907 | 6,947 | 24,081 |
Share of net profit/ (loss) of associates accounted for using the equity method | 31 | 13 | (16) | 29 |
Profit before tax | 30,951 | 29,656 | 30,720 | 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 June 30, 2020 | |||
IT Services Revenue as per IFRS | $ | 1921.6 | |
Effect of Foreign currency exchange movement | $ | 27.6 | |
Non-GAAP Constant Currency IT Services Revenue based on exchange rates of comparable period in previous year | $ | 1949.2 |
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 7139
vipin.nair1@wipro.com
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