Wipro Announces Results for the Quarter ended June 30, 2023, Delivers Net Income growth of 12% YoY

• Total Bookings of $3.7 billion for the Quarter
• Large deal Bookings growth of 9% YoY. Highest in last 8 Quarters
• Operating Cash Flows at 130% of Net Income

 
Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO), a leading technology services and consulting company, announced financial results under International Financial Reporting Standards (IFRS) for the quarter ended June 30, 2023.
 
Highlights of the Results
 
Results for the Quarter ended June 30, 2023:

1. Gross Revenue reached Rs 228.3 billion ($2.8 billion¹), an increase of 6.0% YoY
2. IT Services Segment Revenue increased to $2,778.5 million, an increase of 0.8% YoY and an increase of 6.1% YoY in INR terms
3. Non-GAAP² constant currency IT Services segment revenue decreased 2.8% QoQ, increased 1.1% YoY
4. Total Bookings³ was at $3.7 billion and large deal bookings⁴ was at $1.2 billion, up by 9% YoY
5. IT Services Operating Margin⁵ for the quarter was at 16.0%, up 112 bps YoY
6. Net Income for the quarter was at Rs 28.7 billion ($349.8 million¹), an increase of 12.0% YoY
7. Earnings Per Share for the quarter was at Rs 5.23 ($0.06¹), an increase of 11.5% YoY
8. Operating Cash Flows at 130% of Net Income for the quarter was at Rs 37.5 billion ($457.1 million¹)
9. Voluntary attrition⁶ has continued to moderate QoQ, coming in at an 8-quarter low of 14% in Q1’24

 
Outlook for the Quarter ending September 30, 2023
 
We expect Revenue from our IT Services business segment to be in the range of $2,722 million to $2,805 million*. This translates to sequential guidance of -2.0% to +1.0% in constant currency terms.
 
* Outlook for the Quarter ending September 30, 2023, is based on the following exchange rates: GBP/USD at 1.26, Euro/USD at 1.10, AUD/USD at 0.67, USD/INR at 82.34 and CAD/USD at 0.76
 
Performance for the Quarter ended June 30, 2023

“Wipro’s first quarter results come with a strong backbone of large deal bookings, robust client additions, and resilient margins,” said Thierry Delaporte, CEO and Managing Director. “Despite a gradual reduction in clients’ discretionary spending, we maintained new business momentum. We earned our clients’ trust with strong delivery, innovation, and expanded services that strengthen our long-term businesses, and help capture market share. The launch of Wipro ai360 and the USD 1 billion investment solidifies Wipro’s position as a leading transformation partner that delivers the results and innovation our clients need to future-proof their businesses.”
 
Jatin Dalal, Chief Financial Officer, said, “Our ongoing focus on operational improvement has ensured that margin remains steady even in a softening revenue environment. Our operating Margin for the first quarter was 16% an expansion of 112 basis point YoY. We generated strong operating cash flows at 130% of our net income for the Quarter. EPS for the quarter grew by 11.5% YoY.”
 
Analyst Recognition
 

1. Wipro was positioned as a Leader in IDC MarketScape: Worldwide Artificial Intelligence Services 2023 Vendor Assessment (Doc # US49647023 May 2023)
2. Wipro was positioned as a Leader in Avasant’s Applied AI Services RadarView™ 2022 – 2023
3. Wipro was positioned a Leader in Everest Group’s Application Automation Services PEAK Matrix® Assessment 2023
4. Wipro was rated a Leader in Everest Group’s Enterprise Blockchain Services PEAK Matrix® Assessment 2023
5. Wipro was featured as a Leader in Avasant’s Cybersecurity Services RadarView™ 2023
6. Wipro was rated as a Leader in ISG Provider Lens™ – Network-Software Defined Solutions and Services 2023 – US, UK, Germany (multiple quadrants)
7. Wipro was named as a Leader in ISG Provider Lens™ – ServiceNow Ecosystem Partners 2023 – US (multiple quadrants)
8. Wipro was recognized as a Leader in ISG Provider Lens™ – Salesforce Ecosystem Partners 2023 – US, UK, Germany (multiple quadrants)
9. Wipro was recognized a Leader in Everest Group’s Intelligent Process Automation (IPA) PEAK Matrix® Assessment 2023
10. Wipro was rated as a Leader in Avasant’s Multisourcing Service Integration RadarView™ 2022 – 2023

 
IT Products
 

• IT Products segment revenue for the quarter was Rs 0.69 billion ($8.5 million¹)
• IT Products segment results for the quarter was a loss of Rs 0.16 billion ($2.0 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.
 
Highlights of Strategic Deal Wins
 
In the first quarter, Wipro continued to win large and strategic deals across industries. Key highlights include:
 

• A Fortune 100 global healthcare payer has extended its partnership with Wipro for a multi-year deal, consolidating and transforming their contact center operations. The Wipro team will collaborate with the client to develop solutions to reduce and deflect call volumes, improve productivity, as well as develop AI to simplify processes and improve their Net Promoter Score (NPS).
• Wipro has been awarded a contract by a leading global cycle manufacturer to run an end-to-end transformation program covering business operations in sales, manufacturing, and finance & supply chain across 15 countries. Through this program Wipro will consolidate multiple Enterprise Resource Planning (ERP) systems into a single harmonised Dynamics 365 Finance and Operations (F&O) platform. This will improve inventory and supply chain visibility, leading to better order fulfilment including contract negotiation and value realisation for the procurement function; minimize downtime through better production planning for manufacturing and create better cashflow visibility for finance; while setting up a data foundation to become an AI-driven insights-led organisation.
• A major US airport selected Wipro to help them reduce their carbon footprint, aligned to Airports Carbon Accreditation (ACA) requirements. Wipro will assist by delivering a greenhouse gas inventory analysis, carbon reduction roadmap, sustainability transparency reporting, and the design for their annual report. Wipro will leverage its unique Wipro Impact Framework to align the client to ACA accreditation requirements, while also enabling them to ready for future.
• An energy services and delivery company has selected Wipro to standardize their software development process. The project will enable the client to more efficiently develop software using automation, agile principles, continuous integration, as well as a redesigned team structure. This transformation project will allow for a better flow of business value for the client, reduce technical debt, enable cloud adoption and create an enhanced experience for their customers.
• A global transportation, e-commerce, and business services company has selected Wipro to help address challenges around business transformation, cost optimization and capacity management. The Wipro team will have the ownership and accountability of Specialized Managed Services focused on continuous improvement and outcome-based services. The Wipro team will ensure the retention of institutional knowledge of more than 50 portfolio applications delivering predictable outcomes, driving strategic initiatives, and complementing client’s optimization charter to drive better efficiencies and enhanced user experiences.
• One of the largest home improvement retailers has selected Wipro to help them operate and transform their retail and core finance functions. Wipro and the client will co-create a solution to improve operational efficiencies, optimize costs, and ensure zero disruption during peak periods. The project will also help them gain and retain key talent by supporting flexible work from home model. 
• A leading India-based private sector bank has selected Wipro to transform their traditional Managed Services support model to a Modern Workplace model to enhance their overall user experience and create a hyper-personalized and frictionless workplace. Wipro will deliver rapid transformation through a machine-first approach with cognition, hyper-automation, and analytics. Automation will drive the resolution of up to 25% of the tickets raised. Through an employee-centric design for streamlined banking services, Wipro will enable standardized operations globally, eliminate redundancies and improve service quality with a focus on compliance. Wipro will also provide an efficient, scalable, secure, and centralized estate to improve asset and vendor management.
• A global tech giant chose Wipro to help them reduce their products’ total cost of ownership. Over the course of this multi-year deal, Wipro will set up a dedicated facility to reduce their operational cost burden. The project will involve Quality Assurance automation to improve productivity, reduce costs, and generate additional revenue.
• A general insurance company has selected Wipro to fulfil a multi-year transformation program to migrate their claims legacy landscape to the cloud. One the key aspect of this project is the migration of the client’s inbound and outbound communication as well as documentation to a cloud-based platform. To achieve this, the Wipro team built a bespoke version of our DocHawk tool to seamlessly integrate it into the client’s infrastructure. The client has seen an immediate cost saving of over 30% with the option to expand this efficiency across all other critical programs.
• A global pharmaceutical and medical device company selected Wipro to enable them to track, manage and report complaints. In this highly regulated industry, they needed a partner who had extensive experience in the medical sector, could provide multilingual support, and ensure they remained compliant with relevant regulatory bodies. Wipro devised a unique solution including a multi-lingual contact center, with the ability to support calls, emails, and surface mails. As well as a robust Quality Assurance process, in compliance with FDA guidelines, supported by an automated auditing process to ensure accuracy of data submission to government regulatory bodies, helping the client meet regulatory submission requirements.

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 82.06, as published by the Federal Reserve Board of Governors on June 30, 2023. However, the realized exchange rate in our IT Services business segment for the quarter ended June 30, 2023 was US$1= Rs 81.90
2. Constant currency for a period is the product of volumes in that period times the average actual exchange rate of the corresponding comparative period
3. Total Bookings refers to the total contract value of all orders that were booked during the period including new orders, renewals, and increases to existing contracts. Bookings do not reflect subsequent terminations or reductions related to bookings originally recorded in prior fiscal periods. Bookings are recorded using then-existing foreign currency exchange rates and are not subsequently adjusted for foreign currency exchange rate fluctuations. The revenues from these contracts accrue over the tenure of the contract. For constant currency growth rates, refer note 2
4. Large deal bookings consist of deals greater than or equal to $30 million in total contract value
5. IT Services Operating Margin refers to Segment Results Total as reflected in IFRS financials.
6. Voluntary attrition is in IT Services computed on a quarterly annualised basis and excludes DOP
7. Effective April 1, 2023, we merged our ISRE segment with our IT Services segment. The QoQ and YoY growth rates for the quarter ended June 30, 2023 were computed by rebaselining ISRE numbers in Q4’23 and Q1’23

 
About Key Metrics and Non-GAAP Financial Measures
 
This press release contains key metrics and 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.
 
Our key metrics and non-GAAP financial measures are 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. Our key metrics and non-GAAP financial measures are not comparable to, nor should be substituted for, an analysis of our revenue over time and involve estimates and judgments. In addition to our non-GAAP measures, 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, 2023, prepared under IFRS, along with individual business segment reports, are available in the Investors section of our website www.wipro.com/investors/
 
Quarterly Conference Call

We will hold an earnings conference call today at 07:30 p.m. Indian Standard Time (10:00 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=WIP130723
 
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 technology services and consulting company focused on building innovative solutions that address clients’ most complex digital transformation needs. Leveraging our holistic portfolio of capabilities in consulting, design, engineering, and operations, we help clients realize their boldest ambitions and build future-ready, sustainable businesses. With around 250,000 employees and business partners across 65 countries, we deliver on the promise of helping our clients, colleagues, and communities thrive in an ever-changing world. For additional information, visit us at www.wipro.com

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.
 
 

 
 

Additional Information:
 

 


Effective April 1, 2023, we merged our India State Run Enterprise segment (“ISRE”) with our IT Services segment. Currently, the Company is organized into the following operating segments: IT Services and IT Products.
 
IT Services: As announced on November 12, 2020, effective January 1, 2021, we re-organized our IT Services segment into 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.
 

Reconciliation of selected GAAP measures to Non-GAAP measures
 
Reconciliation of Non-GAAP Constant Currency IT Services Revenue to IT Services Revenue as per IFRS ($Mn)
 
 
                              Three Months ended June 30, 2023
IT Services Revenue as per IFRS                                                            $    2,778.5                                   
Effect of Foreign currency exchange movement                                $    (19.5)
Non-GAAP Constant Currency IT Services Revenue based on         $    2,759.0
previous quarter exchange rates                   
 
 
                              Three Months ended June 30, 2023
IT Services Revenue as per IFRS                                                           $    2,778.5
Effect of Foreign currency exchange movement                               $      8.1
Non-GAAP Constant Currency IT Services Revenue based on        $    2,786.6
exchange rates of comparable period in previous year        
 
Reconciliation of Free Cash Flow for three months ended June 30, 2023