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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

[email protected]

Abhishek Kumar Jain

Phone: +91-9845791363

[email protected]

Contact for Media & Press
Vipin Nair

Phone: +91-80-6142 6450

[email protected]

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