WIPRO Tuesday, April 16, 2019 6:10PM IST (12:40PM GMT)   NYSE:WIT(BSE:507685)(NSE:WIPRO)(NYSE:WIT) Wipro Limited Announces Results for the Quarter and Year ended March 31, 2019 under IFRS   East Brunswick, New Jersey, United States & Bangalore, Karnataka, India Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for the quarter and year ended March 31, 2019.  

  • IT Services Revenue grew 1.4% sequentially
  • Net Income for the quarter grew by 37.7% YoY
Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for the quarter and year ended March 31, 2019.
 
Highlights of the Results

Results for the Year ended March 31, 2019:

  • Gross Revenue was Rs 585.8 billion ($8.5 billion1), an increase of 7.5% YoY
  • IT Services Segment Reported Revenue was $8,120.3 million and grew at Adjusted2 YoY growth of 3.8%
  • Adjusted2 Non-GAAP3 constant currency IT Services Segment Revenue grew 5.4% YoY
  • IT Services Operating Margin4 for the year was 17.9%, an expansion of 1.8% YoY
  • Net Income was Rs 90.0 billion ($1.3 billion1), an increase of 12.4% YoY
  • EPS for the year was Rs 14.99 per share, a growth of 18.6% YoY
  • Board approves Buyback proposal of Rs 105 billion ($1.5 billion1) at a buyback price of Rs 325 ($4.71)
     
Results for the Quarter ended March 31, 2019:
  • Gross Revenue was Rs 150.1 billion ($2.2 billion1), an increase of  9.0% YoY
  • IT Services Segment Revenue was $2,075.5 million, a growth of  1.4% QoQ
  • Non-GAAP3 constant currency IT Services Segment Revenue grew by 1.0% QoQ. Adjusted2 Non-GAAP3 constant currency IT Services Segment Revenue grew 6.9% YoY
  • IT Services Operating Margin4 for the quarter was at 19.0%, an increase of 4.4% YoY
  • Net Income for the quarter was Rs 24.8 billion ($359.1 million1), an increase of 37.7% YoY
  • EPS for the quarter was Rs 4.13 per share, a growth of 37.7% YoY
     
Performance for the quarter & year ended March 31, 2019

Abidali Z. Neemuchwala, CEO and Executive Director said, “Our teams have executed well on our strategy which has resulted in consistent improvement of YoY growth each quarter. We have built a strong foundation for growth on the back of healthy order book and continued investments in big bet areas of Digital, Cyber security, Engineering services and Cloud.  Our customers find these investments relevant as part of their digital transformation and IT Operations landscape modernization, enabling us to win in the market”.
 
Jatin Dalal, Chief Financial Officer said, “Our rigor in execution and focus on improved quality of revenues has resulted in Operating Margins expansion of 1.8% for the year. Our Operating Cash Flows was robust and 129.2% of our Net Income for the year. The announcement to buyback equity shares is part of our philosophy to deliver efficient returns to shareholders.”
 
Outlook for the Quarter ending June 30, 2019

We expect Revenue from our IT Services business to be in the range of $2,046 million to $2,087 million*. This translates to a sequential growth of -1.0% to 1.0% excluding the impact of the divestment of our Workday and Cornerstone On Demand business which was concluded in the quarter ended March 31, 2019.
 
* Outlook is based on the following exchange rates: GBP/USD at 1.32, Euro/USD at 1.14, AUD/USD at 0.71, USD/INR at 70.16 and USD/CAD at 1.33
 
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 323.1 million equity shares of Rs 2 each (representing 5.35% 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 325 ($4.71) per equity share payable in cash for an aggregate amount not exceeding Rs 105 billion ($1.5 billion1).
  • Further to the announcement on January 18, 2019, the Company, during the quarter ended March 31, 2019, allotted Bonus equity shares of Rs 2/- each in the ratio of 1:3 (one bonus share for every three shares held) to the shareholders of the Company who were on the Register of Members of the Company as on March 7, 2019, which was the Record Date fixed by the Board of the Directors for this purpose.
  • The Board of Directors at its meeting held on January 18, 2019, had declared an interim dividend of Rs 1 per equity share for the financial year 2018–19. The Board recommends adoption of the interim dividend as the final dividend for the financial year 2018–19. Thus, the total dividend for the financial year 2018–19 remains Rs 1 per equity share.
     
IT Services

Wipro continued its momentum in winning large deals globally as described below:

  • A leading North American financial services company has awarded a contract to Wipro to transform its security products suite. The multi-year engagement, powered by Wipro HOLMESTM , will help the client achieve operational agility for the adoption of new-age cyber security tools and enhance its security compliance framework.
  • A global technology company has selected Wipro to design and deliver a new level of experience for support services enterprise agility and modernizing core IT systems by leveraging Wipro HOLMESTM  and third party cloud provider.
  • A leading Europe-headquartered manufacturer has awarded a multi-year digital workplace transformation contract to Wipro to drive employee productivity and cost optimization.  The engagement will leverage Wipro’s LiVE WorkspaceTM platform and automation and AI capabilities to enable next-generation digital workplace services for the client.  
  • Wipro has won an applications management contract from a European power company. The multi-year engagement will help the client carry out secure and efficient electricity trade.
  • A global consumer packaged goods company has awarded a cloud and IT infrastructure services contract to Wipro encompassing cloud hosting, applications, desktop virtualization, end user computing and cloud service integration and management.
     
Digital & Cloud Application Services Highlights
 
We continue to see increasing traction in digital oriented deals as illustrated below:
  • Wipro's design-led value proposition, anchored by Wipro Digital and Designit, has secured a multi-year contract from a large North American healthcare company to reimagine their IT service desk and employee experience. The engagement will also leverage the Wipro HOLMESTM  platform.
  • Wipro Digital has been selected to modernize a software-as-a-service e-mail security solution for a global technology company by rebuilding its user interface and other components.
  • Drawing on Wipro's agile way of working and no-shore delivery model, a US retailer has awarded Wipro Digital a contract to build their next generation enterprise content management system that will allow them to create and scale customer experience, across channels through effective digital asset management.
     
Analyst Accolades and Awards
  • Wipro was recognized as the 2018 Citrix Cloud Partner of the Year for the India and ANZ regions for helping customers define their cloud journey in the area of digital workspace.
  • Wipro was positioned as a Leader in Gartner Magic Quadrant for Managed Workplace Services, North America. Daniel Barros, Mark Ray, January 14, 2019
  • Wipro was positioned as a Leader in Gartner Magic Quadrant for Public Cloud Infrastructure Professional and Managed Services, Worldwide, Craig Lowery et al.,February 26, 2019
  • Wipro was positioned as a Leader in Gartner Magic Quadrant for CRM and Customer Experience Implementation Services, Worldwide, Patrick Sullivan, Ed Thompson, February 7 2019
  • Wipro was recognized as a Leader in The Forrester Wave™: Global Continuous Testing Service Providers, Q1 2019
  • Wipro was ranked among the HFS Top 10 High-Tech Service Providers 2019
  • Wipro was featured as a leading service provider in the HFS Top 10 Healthcare Services 2018
  • Wipro was recognized as a Leader by Everest Group in Banking BPO Digital Capability Platform  Service Provider Landscape PEAK Matrix™ Assessment 2019
  • Wipro was recognized as Leader by Everest Group in Application Automation Services PEAK Matrix™ Assessment 2019
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 2.8 billion ($39.9 million1).
  • IT Products Segment Revenue for the year was Rs 12.3 billion ($178.0 million1).
  • IT Products Operating Margin for the quarter was -3.4% and -8.5% for the year.

India business from State Run Enterprises (SRE)
  • India SRE Segment Revenue for the quarter was Rs 1.8 billion ($25.8 million1).
  • India SRE Segment Revenue for the year was Rs 8.5 billion ($123.5 million1).
  • India SRE Operating Margin for the quarter was –43.4% and -21.4% for the year
     
Please refer 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 of the release 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.

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 and year ended March 31, 2019, 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 –

http://services.choruscall.eu/links/wipro190416.html

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 170,000 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 69.16, as published by the Federal Reserve Board of Governors on March 31, 2019. However, the realized exchange rate in our IT Services business segment for the quarter ended March 31, 2019 was US$1= Rs 70.28
  2. The YoY growth rates for quarter and year ended March 31, 2019 have been computed by adjusting revenues for the divestment of our hosted data center services business.
  3. 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.
  4. 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
(₹ in millions, except share and per share data, unless otherwise stated)
      As at March 31,
    2018   2019   2019  
              Convenience translation into US dollar in millions (Refer Footnote 1)  
ASSETS              
Goodwill   117,584   116,980   1,691  
Intangible assets   18,113   13,762   199  
Property, plant and equipment   64,443   70,601   1,021  
Financial assets              
Derivative assets   41   173   3  
Investments   7,668   6,916   100  
Investment in equity accounted investee   1,206   1,235   18  
Trade receivables   4,446   4,373   63  
Other financial assets   4,186   5,146   74  
Deferred tax assets   6,908   5,604   81  
Non-current tax assets   18,349   20,603   298  
Other non-current assets   11,540   15,872   229  
Total non-current assets   254,484   261,265   3,777  
Inventories   3,370   3,951   57  
Financial assets              
Derivative assets   1,232   4,931   71  
Investments   249,094   220,716   3,191  
Cash and cash equivalents   44,925   158,529   2,292  
Trade receivables   100,990   100,489   1,453  
Unbilled receivables   42,486   22,880   331  
Other financial assets   7,429   14,611   211  
Contract assets     15,038   217  
Other current assets   23,167   23,086   334  
Current tax assets   6,262   7,435   108  
    478,955   571,666   8,265  
Assets held for sale   27,201   240   3  
Total current assets   506,156   571,906   8,268  
TOTAL ASSETS   760,640   833,171   12,045  
               
EQUITY              
Share capital   9,048   12,068   174  
Share premium   800   533   8  
Retained earnings   453,265   534,700   7,731  
Share based payment reserve   1,772   2,617   38  
Other components of equity   18,051   18,198   263  
Equity attributable to the equity holders of the Company   482,936   568,116   8,214  
Non-controlling interest   2,410   2,637   38  
TOTAL EQUITY   485,346   570,753   8,252  
LIABILITIES              
Financial liabilities              
Long – term loans and borrowings   45,268   28,368   410  
Derivative liabilities   7      
Other financial liabilities   7      
Deferred tax liabilities   3,059   3,417   49  
Non-current tax liabilities   9,220   11,023   159  
Other non-current liabilities   4,223   5,258   76  
Provisions   3   2    
 Total non-current liabilities   61,787   48,068   694  
Financial liabilities              
Loans, borrowings and bank overdrafts   92,991   71,099   1,028  
Derivative liabilities   2,210   1,310   19  
Trade payables and accrued expenses   68,129   88,304   1,277  
Other financial liabilities   1,050   644   9  
Contract liabilities   17,139   24,768   358  
Current tax liabilities   9,417   9,541   138  
Other current liabilities   15,563   18,046   261  
Provisions   796   638   9  
    207,295   214,350   3,099  
Liabilities directly associated with assets held for sale   6,212      
Total current liabilities   213,507   214,350   3,099  
TOTAL LIABILITIES   275,294   262,418   3,793  
TOTAL EQUITY AND LIABILITIES   760,640   833,171   12,045  
                   

 

WIPRO LIMITED AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENT OF INCOME
(₹ in millions, except share and per share data, unless otherwise stated)
                           
    Three months ended March 31,   Year ended March 31,
    2018   2019   2019   2018   2019   2019  
             Convenience translation into US dollar in millions  (Refer footnote 1)            Convenience translation into US dollar in millions (Refer Footnote 1)  
Gross Revenues   137,686   150,063   2,170   544,871   585,845   8,471  
Cost of revenues   (97,794)   (106,942)   (1,546)   (385,575)   (413,033)   (5,972)  
Gross profit   39,892   43,121   624   159,296   172,812   2,499  
                           
Selling and marketing expenses   (11,263)   (10,994)   (159)   (42,349)   (44,510)   (644)  
General and administrative expenses   (9,801)   (6,669)   (96)   (34,141)   (35,951)   (520)  
Foreign exchange gains/(losses), net   557   316   5   1,488   3,215   46  
Other operating income     1,546   22     4,344   63  
Results from operating activities   19,385   27,320   396   84,294   99,910   1,444  
                           
Finance expenses   (1,564)   (2,530)   (37)   (5,830)   (7,375)   (107)  
Finance and other income   4,803   7,228   105   23,999   22,923   331  
Share of profit /(loss) of equity accounted investee   (3)   (17)     11   (43)   (1)  
Profit before tax   22,621   32,001   464   102,474   115,415   1,667  
Income tax expense   (4,615)   (7,064)   (102)   (22,390)   (25,242)   (365)  
Profit for the period   18,006   24,937   362   80,084   90,173   1,302  
                           
Profit attributable to:                          
Equity holders of the Company   18,028   24,833   359   80,081   90,031   1,300  
Non-controlling interest   (22)   104   3   3   142   2  
Profit for the period   18,006   24,937   362   80,084   90,173   1,302  
                           
Earnings per equity share:                          
Attributable to equity share holders of the Company                          
Basic   3.00   4.13   0.06   12.64   14.99   0.22  
Diluted   3.00   4.12   0.06   12.62   14.95   0.22  
                           
Weighted average number of equity shares                          
used in computing earnings per equity share                          
Basic   6,004,470,975   6,008,783,491   6,008,783,491   6,333,391,200   6,007,376,837   6,007,376,837  
Diluted   6,015,874,721   6,023,959,306   6,023,959,306   6,344,482,633   6,022,304,367   6,022,304,367  
                                                   

Additional Information:
 

Particulars Three months ended Year ended
March
31, 2019
December
31, 2018
March 
31, 2018
March
31, 2019
March 
31, 2018
Audited  Audited Audited Audited Audited
Revenue          
IT Services          
   BFSI 46,043 45,979 37,775 175,262 144,139
Health BU 19,288 19,241 18,559 75,081 74,136
   CBU 23,667 22,875 19,676 89,313 77,914
   ENU 18,628 18,996 16,620 72,830 67,841
TECH 18,402 19,104 19,158 76,591 73,947
MFG 11,551 11,981 11,647 46,496 46,081
   COMM 8,286 8,480 7,834 32,680 33,658
Total of IT Services 145,865 146,656 131,269 568,253 517,716
  IT Products 2,759 3,145 4,169 12,312 17,998
ISRE 1,787 1,713 2,850 8,544 10,694
  Reconciling Items (32) (8) (45) (49) (49)
Total Revenue 150,379 151,506 138,243 589,060 546,359
           
Other operating Income          
IT Services 1,546 4,344
IT Products
ISRE
Total Other Operating Income 1,546 4,344
           
Segment Result          
IT Services          
   BFSI 9,649 9,095 6,256 33,831 24,549
Health BU 1,940 1,973 1,826 8,638 9,624
   CBU 4,716 5,291 2,943 16,828 12,619
   ENU 2,787 3,613 2,287 7,081 8,097
TECH 3,031 4,177 3,717 15,916 14,680
MFG 2,262 2,391 1,739 8,327 7,007
   COMM 985 1,578 (749) 4,396 3,236
   Unallocated 1,161 976 1,180 3,142 3,347
Other Operating Income 1,546 4,344
Total of IT Services 28,077 29,094 19,199 102,503 83,159
IT Products (93) 212 48 (1,047) 362
ISRE (775) (686) 124 (1,829) 454
Reconciling Items 111 48 14 283 319
Total 27,320 28,668 19,385 99,910 84,294
Finance Expense (2,530) (1,627) (1,564) (7,375) (5,830)
Finance and Other Income 7,228 5,362 4,803 22,923 23,999
Share of profit/ (loss) of equity accounted investee (17) 7 (3) (43) 11
Profit before tax 32,001 32,410 22,621 115,415 102,474

 
IT Services: The IT Services segment primarily consists of IT Service offerings to customers organized by industry verticals. Effective April 1, 2018, consequent to change in organization structure, the Company reorganized its industry verticals. The Manufacturing (MFG) and Technology Business unit (TECH) are split from the former Manufacturing & Technology (MNT) business unit.
 
The revised industry verticals are as follows: Banking, Financial Services and Insurance (BFSI), Health Business unit (Health BU) previously known as Health Care and Life Sciences Business unit (HLS), 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.
 
Comparative information has been restated to give effect to the above changes.
 
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 services segment (ISRE): This segment consists of IT Services offerings to entities/ departments owned or controlled by 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 March 31, 2019

IT Services Revenue as per IFRS                                                     $  2,075.5
Effect of Foreign currency exchange movement                              $      (7.6)
Non-GAAP Constant Currency IT Services Revenue based on       $  2,067.9
previous quarter exchange rates                                                                 
 

Three Months ended March 31, 2019

IT Services Revenue as per IFRS                                                   $    2,075.5
Effect of Foreign currency exchange movement                            $         57.6
Non-GAAP Constant Currency IT Services Revenue based on     $    2,133.1
exchange rates of comparable period in previous year          
 

Year ended March 31, 2019

IT Services Revenue as per IFRS                                                      $           8,120.3
Effect of Foreign currency exchange movement                               $              130.3
Non-GAAP Constant Currency IT Services Revenue based on        $           8,250.6
Previous year exchange rates

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Wipro Limited,
,+91 (80) 46727139 , iyer.aparna@wipro.com

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Wipro Limited,
,+1 978 826 4700 , abhishekkumar.jain@wipro.com

Vipin Nair,
Wipro Limited,
,+91 (80) 61426450 , vipin.nair1@wipro.com