Wipro Limited Announces Results for the Quarter Ended December 31, 2020 Under IFRS

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  • IT Services Revenue growth at 3.9% QoQ, highest in 36 quarters
  • Net Income for the quarter increased by 20.8% YoY

Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for the quarter ended December 31, 2020.
 
Highlights of the Results

Results for the Quarter ended December 31, 2020:

  • Gross Revenue was Rs 156.7 billion ($2.1 billion1), an increase of 3.7% QoQ and 1.3% YoY
  • IT Services Segment Revenue was at $2,071 million, a sequential growth of 3.9%
  • Non-GAAP2 constant currency IT Services Segment Revenue increased by 3.4% QoQ
  • IT Services Operating Margin3 for the quarter was at 21.7%, an expansion of 243 bps QoQ and 329 bps YoY
  • Net Income for the quarter was Rs 29.7 billion ($406 million1), an increase of 20.8% YoY
  • Earnings Per Share for the quarter was at Rs5.21 ($0.071), an increase of 20.7% YoY
  • Operating Cash Flow was at Rs 44.3 billion ($607 million1), which is 149.4% of Net Income
  • Wipro declared an interim dividend of Rs 1 ($0.0141) per equity share/ADS

 
Performance for the quarter ended December 31, 2020
 
Thierry Delaporte, CEO and Managing Director said, “Wipro has delivered a second consecutive quarter of strong performance on order booking, revenue and margins. Five of our sectors grew over 4% sequentially. We closed our largest ever deal win in Continental Europe. The demand environment is steadily improving, especially for digital transformation, digital operations, and cloud services. I am also pleased to share with you that we have moved into our new organization structure and are stabilizing quickly.”
 
Jatin Dalal, Chief Financial Officer said, “Our margins are now at a 22 quarters high. The expansion was led by improved revenue growth trajectory and excellence in operations with several metrics at an all-time high. Our Operating Cash Flows grew by 45% YoY with a significant improvement in outstanding receivables.”
 
Outlook for the quarter ending March 31, 2021

We expect Revenue from our IT Services business to be in the range of $2,102 million to $2,143 million*. This translates to a sequential growth of 1.5% to 3.5%.
 
* Outlook is based on the following exchange rates: GBP/USD at 1.33, Euro/USD at 1.20, AUD/USD at 0.73, USD/INR at 73.84 and CAD/USD at 0.76
 
IT Services

Wipro continued its momentum in winning large deals with our customers as described below:
 

  • Wipro has secured a contract for the upstream and downstream business of a UK-based energy company to transform their existing application maintenance services to a DevOps model, aligned with their new digital organization. This will enable the client to be more agile and respond swiftly to the changing business demands while ensuring cost optimization.
  • Wipro has won an engagement with a global new-age technology corporation to provide B2B customer and technology support for their business communication platform. Wipro will also provide account review services to determine any unauthorized access, and offer Quality as a Service (QaaS) to the client.
  • Wipro has won an engagement with a US-based public relations and media services company to streamline its operations across US, Canada, UK, Europe, India, and APAC, in addition to consolidating its supplier base.
  • Wipro has secured a contract from a large US-based telecom service provider to manage their sales support and sales request functions for the order management process. As part of the engagement, Wipro will bring about technology transformation to reduce the cycle time for order processing, ensuring faster deployment of services.
  • A global energy corporation has awarded Wipro a multi-year contract to provide digital services. The engagement includes support and development of business and enterprise applications for the upstream, midstream and downstream lines of business and corporate functions of the company.

 
Digital & Cloud Application Services Highlights

We continue to see increasing traction in digital oriented deals as illustrated below:
 

  • A global beverage company has selected Designit, a Wipro company, to support a new product and service in the area of public and semi-public vending. Designit will analyze market and consumer insights and create vision concepts for the launch.
  • A US-based network software provider has awarded Wipro a contract to co-develop their 5G Radio Unit product and variants for global markets. The deal encompasses system architecture, software/hardware design, development, integration and validation to enable the customer achieve faster and cost-effective time-to-market.
  • A European multinational manufacturing company has awarded Wipro a contract to provide cloud managed services, application testing platforms and managed security services. Wipro will provide innovative solutions for Cloud access security, application security and vulnerability management using AI-based orchestration & automation.
  • Wipro’s crowdsourcing platform Topcoder has won an engagement with a leading US-based pharmaceutical company to provide on-demand digital talent and development capability to their R&D Data Science Team. As part of the engagement, Topcoder’s Platform and Data Science Community was leveraged to validate a COVID prediction model, operationalize it for use with customer data, and develop visualizations for the effort, all in under four weeks. The client had worked with Topcoder in June 2020 to plan for COVID vaccine trials.

Analyst Recognition
 

  • Wipro was positioned as a Leader in Gartner Magic Quadrant for Managed Network Services, Ted Corbett, Lisa Pierce, Danellie Young et al., 9 Nov 2020 
  • Wipro was positioned as a Leader in IDC MarketScape Asia/Pacific Salesforce Implementation Services 2020 Vendor Assessment (Doc #AP46211420, Nov 2020) 
  • Wipro was positioned as a Leader in IDC MarketScape Worldwide Life Science Sales and Marketing Digital Transformation 2020 Vendor Assessment (Doc #US42724918, Dec 2020) 
  • Wipro was recognized as a Leader in IDC MarketScape GCC Professional Security Services 2020 Vendor Assessment (Doc #META47033220, Dec 2020) 
  • Wipro was positioned as a Leader in IDC MarketScape Worldwide Retail Commerce Platform Service Providers 2020 Vendor Assessment (Doc #US46162920, Dec 2020) 
  • Wipro was positioned as a Leader in Everest Group’s System Integrator (SI) Capabilities on Amazon Web Services (AWS), Microsoft Azure Services and Google Cloud Platform (GCP) Services PEAK Matrix® Assessments 2021
  • Wipro was recognized as a Leader and Star Performer in Everest Group’s Application and Digital Services (ADS) in Life and Annuities (L&A) Insurance PEAK Matrix® Assessment 2021
  • Wipro was recognized as a Leader in Everest Group’s Artificial Intelligence (AI) Services PEAK Matrix® Assessment 2021
  • Wipro Ranks #2 for Customer Satisfaction in Whitelane 2020 French IT Sourcing Study

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 Rs1.6 billion ($21.3 million1)
  • IT Products Segment Results for the quarter was a profit of Rs0.09 billion ($1.2 million1)

 
India business from State Run Enterprises (ISRE)

  • India SRE Segment Revenue for the quarter was Rs2.4 billion ($32.8 million1)
  • India SRE Segment Results for the quarter was a profit of Rs0.47 billion ($6.5 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 December 31, 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 07:45 p.m. Indian Standard Time (09:15 a.m. U.S. Eastern Time) to discuss our performance for the quarter. The audio from the conference call will be available online through a web-cast and can be accessed at the following link- https://links.ccwebcast.com/?EventId=WIPRO30121
 
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 73.01, as published by the Federal Reserve Board of Governors on December 31, 2020. However, the realized exchange rate in our IT Services business segment for the quarter ended December 31, 2020 was US$1= Rs 74.04
  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 December 31, 2020
               Convenience translation into US dollar in millions Refer footnote 1
ASSETS              
Goodwill     131,012   136,322   1,867
Intangible assets     16,362   13,056   179
Property, plant and equipment     81,120   83,372   1,142
Right-of-Use assets     16,748   15,427   211
Financial assets              
Derivative assets     –   51   1
Investments     9,302   8,679   119
Trade receivables     6,049   4,613   63
Other financial assets     5,881   6,657   91
Investments accounted for using the equity method     1,383   1,459   20
Deferred tax assets     6,005   1,690   23
Non-current tax assets     11,414   14,020   192
Other non-current assets     11,935   11,433   157
Total non-current assets     297,211   296,779   4,065
Inventories     1,865   1,205   17
Financial assets              
Derivative assets     3,025   4,088   56
Investments     189,635   312,909   4,286
Cash and cash equivalents     144,499   139,435   1,910
Trade receivables     104,474   91,841   1,258
Unbilled receivables     25,209   23,105   316
Other financial assets     8,614   9,028   124
Contract assets     17,143   14,847   203
Current tax assets     2,882   2,354   32
Other current assets     22,505   22,144   303
Total current assets     519,851   620,956   8,505
               
TOTAL ASSETS     817,062   917,735   12,570
               
EQUITY              
Share capital     11,427   11,431   157
Share premium     1,275   1,815   25
Retained earnings     476,103   424,275   5,811
Share-based payment reserve     1,550   1,765   24
SEZ Re-investment reserve     43,804   57,217   784
Other components of equity     23,299   30,647   420
Equity attributable to the equity holders of the Company     557,458   527,150   7,221
Non-controlling interest     1,875   1,489   20
TOTAL EQUITY     559,333   528,639   7,241
               
LIABILITIES              
Financial liabilities              
Loans and borrowings     4,840   213   3
Derivative liabilities       138   –   –
Lease liabilities     12,638   12,894   177
Other financial liabilities     151   929   13
Deferred tax liabilities     2,825   5,181   71
Non-current tax liabilities     13,205   12,442   170
Other non-current liabilities     7,537   7,803   107
Provisions     2   1    ^
 Total non-current liabilities     41,336   39,463   541
Financial liabilities              
Loans, borrowings and bank overdrafts     73,202   73,256   1,003
Derivative liabilities     7,231   3,467   47
Trade payables and accrued expenses     78,129   83,461   1,143
Lease liabilities     6,560   7,502   103
Other financial liabilities     899   96,604   1,323
Contract liabilities     18,775   22,118   303
Current tax liabilities     11,731   15,913   218
Other current liabilities     19,254   46,627   639
Provisions     612   685   9
Total current liabilities     216,393   349,633   4,788
TOTAL LIABILITIES     257,729   389,096   5,329
               
TOTAL EQUITY AND LIABILITIES     817,062   917,735   12,570
^ 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 December 31,   Nine months ended December 31,
      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     154,705   156,700   2,146   453,122   456,976   6,259
Cost of revenues     (109,673)   (104,313)   (1,429)   (321,952)   (313,400)   (4,293)
Gross profit     45,032   52,387   717   131,170   143,576   1,966
                           
Selling and marketing expenses     (11,030)   (11,326)   (155)   (32,612)   (30,721)   (421)
General and administrative expenses     (7,496)   (7,814)   (107)   (22,142)   (25,997)   (356)
Foreign exchange gains     727   566   8   2,176   2,109   29
Other operating income/(loss), net     –   –   –   749   (81)   (1)
Results from operating activities     27,233   33,813   463   79,341   88,886   1,217
                           
Finance expenses     (1,844)   (1,400)   (19)   (5,675)   (3,966)   (54)
Finance and other income     5,370   5,975   82   19,174   16,465   226
Share of net profit /(loss) of associates accounted for using the equity method     34   101   1   16   126   2
Profit before tax     30,793   38,489   527   92,856   101,511   1,391
Income tax expense     (6,164)   (8,524)   (117)   (18,594)   (22,590)   (309)
Profit for the period     24,629   29,965   410   74,262   78,921   1,082
                           
Profit attributable to:                          
Equity holders of the Company     24,558   29,667   406   73,958   78,225   1,072
Non-controlling interest     71   298   4   304   696   10
Profit for the period     24,629   29,965   410   74,262   78,921   1,082
                           
Earnings per equity share:                          
Attributable to equity holders of the Company                          
Basic     4.31   5.21   0.07   12.58   13.74   0.19
Diluted     4.30   5.17   0.07   12.55   13.46   0.18
                           
Weighted average number of equity shares                          
used in computing earnings per equity share                          
Basic     5,692,132,118   5,696,798,493   5,696,798,493   5,879,588,157   5,694,731,405   5,694,731,405
Diluted     5,703,265,041   5,741,070,466   5,741,070,466   5,892,966,906   5,812,779,105   5,812,779,105
                           

 
 
Additional Information:
 

Particulars Three months ended Nine months ended Year ended
December
31, 2020		 September
30, 2020		 December
31, 2019		 December
31, 2020		 December
31, 2019		 March
31, 2020
Audited  Audited  Audited  Audited  Audited  Audited
Revenue            
IT Services            
   BFSI 46,825 45,995 46,612 137,648 137,767 184,457
Health BU 21,266 20,294 19,799 61,320 57,651 78,240
   CBU 25,077 23,927 25,443 72,183 71,339 97,008
   ENU 20,076 18,990 19,553 58,345 56,873 76,443
TECH 19,394 18,478 18,584 57,542 56,392 75,895
MFG 12,677 12,175 12,450 36,672 35,672 48,158
   COMM 8,016 7,822 8,565 23,258 25,387 33,840
Total of IT Services 153,331 147,681 151,006 446,968 441,081 594,041
IT Products 1,552 1,691 2,576 5,501 8,218 11,010
ISRE 2,393 2,119 1,847 6,629 6,059 8,400
Reconciling Items (10) (8) 3 (13) (60) (50)
Total Revenue 157,266 151,483 155,432 459,085 455,298 613,401
             
Other operating income/(loss), net            
IT Services – (178) – (81) 749 1,144
Total Other operating income/(loss), net – (178) – (81) 749 1,144
             
Segment Result            
IT Services            
   BFSI 9,820 9,209 8,246 27,546 25,988 34,132
Health BU 4,359 4,005 3,186 11,092 8,978 12,027
   CBU 6,166 5,507 4,725 16,092 12,183 16,729
   ENU 3,688 3,329 3,130 10,586 8,410 12,176
TECH 3,128 2,632 3,256 9,927 10,406 14,312
MFG 2,552 2,379 2,385 7,159 6,916 9,252
   COMM 1,445 1,320 1,444 3,656 4,006 5,336
   Unallocated 2,046 148 1,360 3,400 3,124 2,577
Other operating income/(loss), net – (178) – (81) 749 1,144
Total of IT Services 33,204 28,351 27,732 89,377 80,760 107,685
IT Products 89 (300) (140) (87) (398) (282)
ISRE 473 114 (528) 487 (1,341) (1,822)
Reconciling Items 47 (30) 169 (891) 320 149
Total 33,813 28,135 27,233 88,886 79,341 105,730
Finance Expense (1,400) (1,267) (1,844) (3,966) (5,675) (7,328)
Finance and Other Income 5,975 5,209 5,370 16,465 19,174 24,081
Share of net profit/ (loss) of associates accounted for using the equity method 101 (6) 34 126 16 29
Profit before tax 38,489 32,071 30,793 101,511 92,856 122,512

 
 
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 December 31, 2020
IT Services Revenue as per IFRS                                                                $         2,071.0
Effect of Foreign currency exchange movement                                       $             (11.8)
Non-GAAP Constant Currency IT Services Revenue based on                $         2,059.2
previous quarter exchange rates                     
 
                      Three Months ended December 31, 2020
IT Services Revenue as per IFRS                                                                 $         2,071.0
Effect of Foreign currency exchange movement                                      $           (17.9)
Non-GAAP Constant Currency IT Services Revenue based on               $         2,053.1
exchange rates of comparable period in previous year  
 

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