Business Wire India
IT Services delivers strong revenue growth for the quarter at 12.2% QoQ
Net Income & EPS showed a robust increase of 35.2% YoY and 41.0% YoY respectively
Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for the Quarter ended June 30, 2021.
Highlights of the Results
Results for the Quarter ended June 30, 2021:
Gross Revenue was Rs 182.5 billion ($2.5 billion1), an increase of 12.4% QoQ and 22.4% YoY
IT Services Segment Revenue was at $2,414.5 million, an increase of 12.2% QoQ and 25.7% YoY
Non-GAAP2 constant currency IT Services Segment Revenue increased by 12.0% QoQ and 21.3% YoY
IT Services Operating Margin3 for the quarter was at 18.8%, a decrease of 29 bps YoY
Net Income for the quarter was Rs 32.3 billion ($434.8 million1), an increase of 35.2% YoY
Earnings Per Share for the quarter was at Rs 5.92 ($0.081), an increase of 41.0% YoY
Operating Cash Flow was at Rs 33.5 billion ($451.1 million1), which is 103.7% of Net Income
Our IT Services workforce crossed the milestone of 200K, closing headcount at 209,890
In June 2021, we issued our first ever dollar denominated bond offering of $750 million with a 5-year tenor
Performance for the quarter ended June 30, 2021
Thierry Delaporte, CEO and Managing Director said, “Despite the severe onslaught of the pandemic, we delivered our best-ever quarter, with secular growth across all SMUs, Sectors and GBLs. Our sequential revenue growth of 12.2% was well ahead of the top-end of our guidance range, both organically and with Capco. Though in the early days yet, I am pleased with the way we have collaborated with Capco to build our joint go-to-market offerings and strategy. We remain focused on deepening our customer relationships, investing in talent & capabilities for the future, and winning market share.”
Jatin Dalal, Chief Financial Officer said, “We delivered a robust growth in EPS of 41% YoY even as we continued to invest for growth. At 103.7% of our net income, our operating cash flows for the quarter remained healthy. I am also pleased to share that we have successfully issued our debut bond offering in the international markets for $750 million.”
Outlook for the quarter ending September 30, 2021
We expect Revenue from our IT Services business to be in the range of $2,535 million to $2,583 million*. This translates to a sequential growth of 5.0% to 7.0%.
Wipro signed an agreement to acquire Ampion on April 1, 2021, and we previously announced that it will be closed during Q1’22. However certain regulatory approvals are still pending and the transaction is now expected to be closed in Q2’22.
*Outlook is based on the following exchange rates: GBP/USD at 1.40, Euro/USD at 1.21, AUD/USD at 0.77, USD/INR at 73.79 and CAD/USD at 0.81
IT Services
Wipro continued its momentum in winning large deals with our customers as described below:
Wipro has won a multi-year engagement with a leading US-based communication services provider to deliver end-to-end quality engineering (QE) services for their applications, accelerating software release velocity and improving QE maturity. Additionally, the customer has selected Wipro to support database operations in a managed services model. Wipro will drive migration to new age databases and enhance operational efficiencies through automation
A US based oil field services company has awarded Wipro a strategic IT outsourcing contract to provide applications, infrastructure, & cybersecurity services. Wipro will also assist the customer in digital transformation projects including modernizing the IT operations, reducing IT operating cost, and improving IT services experience for end users to enable scalable services in a changing energy industry
A European multinational pharmaceutical company has awarded Wipro a multi-million-dollar engagement to personalize end user services leveraging digital interventions to ensure superior consumer experience for their employees globally
Wipro has won a large digital workplace contract from a US-based health insurance company to transform and manage their end user services globally to improve customer experience centered around a digital-first theme
A leading multinational electric and gas utility provider has awarded Wipro a global strategic IT infrastructure contract. The engagement will enhance the customer’s digital transformation journey, leveraging integrated managed services and consolidating multiple data centers to next-generation hosting services, through Wipro’s Boundaryless Enterprise solutions
Digital Services Highlights
We continue to see increasing traction in digital oriented and other strategic deals as illustrated below:
A leading US-based distributor of plumbing supplies has selected Wipro to support its cloud transformation journey by embedding quality engineering in the development lifecycle encompassing CRM implementation, data migration, and legacy applications. Additionally, Wipro will provide managed services for Cloud ERP covering multiple business functions, resulting in improved business agility and enhancing customer experience across more than 1,400 store locations
A global shipping and logistics company has engaged Wipro for the digital transformation and modernization of its integrated shipping portfolio. The engagement will make it easier for the end customers to integrate their services, while providing improved reliability and speed, thus enabling the client to compete in the global e-commerce market
Wipro has won a strategic engagement with a leading US-based financial services company to accelerate their digital transformation journey by implementing an outcome-based high velocity software engineering model enabled by multi-skilled agile teams deployed globally
A globally integrated energy company has selected Wipro’s crowdsourcing platform Topcoder to design their next-generation customer-centric experience for promotion and loyalty management. Topcoder’s on-demand community will help accelerate product development, applying experience design to enable scale and expansion of the digital product globally
A leading US-based medical devices original equipment manufacturer (OEM) has selected Wipro to build and launch a global patient engagement platform encompassing their cardiac rhythm management portfolio of devices
Analyst Recognition
Wipro was positioned as a Leader in IDC MarketScape: Worldwide Supply Chain SAP Ecosystems Services 2021 Vendor Assessment (Doc #US47537120, Mar 2021)
Wipro was positioned as a Leader in IDC MarketScape: Worldwide Smart Manufacturing Service Providers 2021 Vendor Assessment (Doc #EUR147689021, Jun 2021)
Wipro was positioned as a Leader in IDC MarketScape: Worldwide Artificial Intelligence Services 2021 Vendor Assessment ( Doc #US46741921, May 2021)
Wipro was recognized as a Leader in Everest Group’s IT Managed Security Services PEAK Matrix® Assessment 2021
Wipro was recognized as a Leader and Star Performer in Everest Group’s Life Sciences Operations Services PEAK Matrix® Assessment 2021
Wipro was positioned as a Leader in Everest Group’s Application and Digital Services in Banking PEAK Matrix® Assessment 2021
Wipro was rated as a Leader in ISG Provider Lens™ ServiceNow Ecosystem Partners 2021: Implementation & Integration Services and Managed Services Providers – US
Wipro was rated as a Leader in ISG Provider Lens™ Microsoft Ecosystem 2021: Managed Services for Azure, SAP on Azure, Dynamics 365 and Office 365 Modern Workplace – US
Wipro ranks among the Top Service Providers in Customer Satisfaction Category in Whitelane & PA Consulting UK IT Outsourcing Study 2021
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 1.3 billion ($17.6 million1)
IT Products Segment Results for the quarter was a loss of Rs 0.1 billion ($0.7 million1)
India business from State Run Enterprises (ISRE)
India SRE Segment Revenue for the quarter was Rs 1.9 billion ($26.1 million1)
India SRE Segment Results for the quarter was a profit of Rs 0.5 billion ($6.4 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 June 30, 2021, 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=WIPRO210415
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 200,000 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.
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 74.33, as published by the Federal Reserve Board of Governors on June 30, 2021. However, the realized exchange rate in our IT Services business segment for the quarter ended June 30, 2021 was US$1= Rs 74.75
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
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, 2021
As at June 30, 2021
Convenience translation into US dollar in millions
Refer footnote 1
ASSETS
Goodwill
139,127
223,485
3,007
Intangible assets
13,085
43,029
579
Property, plant and equipment
85,192
86,720
1,167
Right-of-Use assets
16,420
19,804
266
Financial assets
Derivative assets
16
17
^
Investments
10,576
11,024
148
Trade receivables
4,358
4,392
59
Other financial assets
6,088
8,248
111
Investments accounted for using the equity method
1,464
709
10
Deferred tax assets
1,664
2,743
37
Non-current tax assets
14,323
11,099
149
Other non-current assets
15,935
11,795
159
Total non-current assets
308,248
423,065
5,692
Inventories
1,064
945
13
Financial assets
Derivative assets
4,064
2,458
33
Investments
175,707
167,034
2,247
Cash and cash equivalents
169,793
140,617
1,892
Trade receivables
94,298
104,377
1,404
Unbilled receivables
27,124
33,663
453
Other financial assets
7,245
8,670
117
Contract assets
16,507
20,052
270
Current tax assets
2,461
4,587
62
Other current assets
24,923
25,966
349
Total current assets
523,186
508,369
6,840
TOTAL ASSETS
831,434
931,434
12,532
EQUITY
Share capital
10,958
10,958
147
Share premium
714
740
10
Retained earnings
466,692
498,003
6,700
Share-based payment reserve
3,071
3,884
52
SEZ Re-investment reserve
41,154
42,297
569
Other components of equity
30,506
33,785
455
Equity attributable to the equity holders of the Company
553,095
589,667
7,933
Non-controlling interests
1,498
1,095
15
TOTAL EQUITY
554,593
590,762
7,948
LIABILITIES
Financial liabilities
Loans and borrowings
7,458
55,392
745
Lease liabilities
13,513
15,862
213
Other financial liabilities
2,291
3,349
45
Deferred tax liabilities
4,633
14,367
193
Non-current tax liabilities
11,069
11,083
149
Other non-current liabilities
7,835
10,082
136
Provisions
2
1
^
Total non-current liabilities
46,801
110,136
1,481
Financial liabilities
Loans, borrowings and bank overdrafts
75,874
60,105
809
Derivative liabilities
1,070
1,218
16
Trade payables and accrued expenses
78,870
88,941
1,197
Lease liabilities
7,669
8,811
119
Other financial liabilities
1,470
4,091
55
Contract liabilities
22,535
21,153
286
Current tax liabilities
17,324
18,088
243
Other current liabilities
24,552
27,450
369
Provisions
676
679
9
Total current liabilities
230,040
230,536
3,103
TOTAL LIABILITIES
276,841
340,672
4,584
TOTAL EQUITY AND LIABILITIES
831,434
931,434
12,532
^ 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,
2020
2021
2021
Convenience translation into US dollar in millions
Refer footnote 1
Revenues
149,131
182,524
2,456
Cost of revenues
(103,700)
(127,567)
(1,716)
Gross profit
45,431
54,957
740
Selling and marketing expenses
(9,789)
(13,017)
(175)
General and administrative expenses
(10,006)
(10,530)
(142)
Foreign exchange gains/(losses), net
1,205
1,160
16
Other operating income/(loss), net
97
2,150
29
Results from operating activities
26,938
34,720
468
Finance expenses
(1,299)
(746)
(10)
Finance and other income
5,281
4,619
62
Share of net profit of associates accounted for using the equity method
31
7
^
Profit before tax
30,951
38,600
520
Income tax expense
(6,838)
(6,225)
(84)
Profit for the period
24,113
32,375
436
Profit attributable to:
Equity holders of the Company
23,902
32,321
435
Non-controlling interests
211
54
1
Profit for the period
24,113
32,375
436
Earnings per equity share:
Attributable to equity holders of the Company
Basic
4.20
5.92
0.08
Diluted
4.19
5.90
0.08
Weighted average number of equity shares
used in computing earnings per equity share
Basic
5,693,348,171
5,462,996,981
5,462,996,981
Diluted
5,703,168,248
5,476,992,662
5,476,992,662
^ Value is less than 1
Additional Information:
Particulars
Three months ended
Year ended
June 30,
2021
March 31,
2021
June 30,
2020
March 31,
2021
Audited
Audited
Audited
Audited
Revenue
IT Services
Americas 1
49,683
46,510
42,612
178,091
Americas 2
55,105
46,475
44,194
179,821
Europe
54,461
45,107
38,944
165,441
APMEA
21,232
20,825
20,158
82,462
Total of IT Services
180,481
158,917
145,908
605,815
IT Products
1,311
2,117
2,306
7,685
ISRE
1,937
2,302
2,111
8,912
Reconciling Items
(45)
4
11
13
Total Revenue
183,684
163,340
150,336
622,425
Other operating income/(loss), net
IT Services
2,150
–
97
(81)
Total Other operating income/(loss), net
2,150
–
97
(81)
Segment Result
IT Services
Americas 1
9,379
9,863
6,504
33,040
Americas 2
11,350
10,500
10,422
41,589
Europe
8,325
8,704
7,547
31,673
APMEA
3,066
3,074
2,546
11,476
Unallocated
56
1,257
748
5,153
Other operating income/(loss), net
2,150
–
97
(81)
Total of IT Services
34,326
33,398
27,864
122,850
IT Products
(53)
145
123
45
ISRE
475
587
(106)
1,061
Reconciling Items
(28)
37
(943)
(903)
Total
34,720
34,167
26,938
123,053
Finance expenses
(746)
(1,122)
(1,299)
(5,088)
Finance and Other Income
4,619
4,447
5,281
20,912
Share of net profit of associates accounted for using the equity method
7
4
31
130
Profit before tax
38,600
37,496
30,951
139,007
The Company is organized into the following operating segments: IT Services, IT Products and India State Run Enterprise segment (ISRE).
IT Services: As announced on November 12, 2020, effective January 1, 2021, the Company re-organized IT Services segment.to four Strategic Market Units (“SMUs”) – Americas 1, Americas 2, Europe and Asia Pacific Middle East Africa (“APMEA”).
Americas 1 and Americas 2 are primarily organized by industry sector, while Europe and APMEA are organized by countries.
Americas 1 includes Healthcare and Medical Devices, Consumer Goods and Lifesciences, Retail, Transportation and Services, Communications, Media and Information services, Technology Products and Platforms, in the United States of America and entire business of Latin America (“LATAM”). Americas 2 includes Banking, Financial Services and Insurance, Manufacturing, Hi-tech, Energy and Utilities industry sectors in the United States of America and entire business of Canada. Europe consists of United Kingdom and Ireland, Switzerland, Germany, Benelux, Nordics and Southern Europe. APMEA consists of Australia and New Zealand, India, Middle East, South East Asia, Japan and Africa.
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, 2021
IT Services Revenue as per IFRS $ 2,414.5
Effect of Foreign currency exchange movement $ (4.5)
Non-GAAP Constant Currency IT Services Revenue based on $ 2,410.0
previous quarter exchange rates
Three Months ended June 30, 2021
IT Services Revenue as per IFRS $ 2,414.5
Effect of Foreign currency exchange movement $ (83.8)
Non-GAAP Constant Currency IT Services Revenue based on $ 2,330.6
exchange rates of comparable period in previous year
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