Wipro Limited Announces Results for the Quarter ended December 31, 2021 under IFRS

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Business Wire IndiaWipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for the Quarter ended December 31, 2021.
 
Highlights of the Results
Results for the Quarter ended December 31, 2021:

  • Gross Revenue was Rs 203.1 billion ($2.7 billion1), an increase of 3.3% QoQ and 29.6% YoY
  • IT Services Segment Revenue was at $2,639.7 million, an increase of 2.3% QoQ and 27.5% YoY
  • Non-GAAP2 constant currency IT Services Segment Revenue increased by 3.0% QoQ and 28.5% YoY
  • IT Services Operating Margin3 for the quarter was at 17.6%, a decrease of 19 bps QoQ
  • Net Income for the quarter was Rs 29.7 billion ($399.1 million1), increase of 1.3% QoQ
  • Earnings Per Share for the quarter was at Rs 5.43 ($0.071), an increase of 4.2% YoY
  • Operating Cash Flow was at Rs 30.1 billion ($404.2 million1), which is 101.3% of Net Income
  • Our closing strength of employees for IT Services was at 231,671, an increase of 41,363 employees on a net basis YoY. We added 10,306 employees during the quarter
  • Wipro declared an interim dividend of Rs 1 ($0.0131) per equity share/ADS

 
Performance for the quarter ended December 31, 2021
 
Thierry Delaporte, CEO and Managing Director said, “Wipro has delivered a fifth consecutive quarter of strong performance, both on revenues, and margins. Order bookings have been strong too, and we have added seven new customers in the more than $100 Mn revenue league, in the last 12 months. Our strategy and improved execution continue to serve us well, and we are confident of building on this momentum. We are also excited to have completed the acquisitions of Edgile and LeanSwift Solutions in the quarter, both of which will add to our capabilities significantly.”
 
Jatin Dalal, Chief Financial Officer said, “We delivered robust operating margins after absorbing substantial investments on salary increases, owing to continued improvement in operating metrics. We also improved our working capital, by reducing our Days Sales Outstanding. This has resulted in strong operating cash flow conversion, of 101.3% of net income. Additionally, we have declared an interim dividend of Rs 1 per equity share.”
 
Outlook for the quarter ending March 31, 2022
We expect Revenue from our IT Services business to be in the range of $2,692 million to $2,745 million*. This translates to a sequential growth of 2.0% to 4.0%.
 
*Outlook is based on the following exchange rates: GBP/USD at 1.34, Euro/USD at 1.13, AUD/USD at 0.73, USD/INR at 75.73 and CAD/USD at 0.79
 
IT Services
Wipro continued its momentum in winning large deals with our customers as described below:
 

  • A US-based healthcare company has awarded Wipro a business process and platform services contract spanning claims processing and setting up a customer service center using Wipro’s proprietary healthcare platform. Wipro will enable the client to expand its product offerings and go-to-market strategies and grow in this business segment.
  • A leading US-based student-aid organization has awarded Wipro a multi-million dollar engagement to manage and streamline their mainframe operations to support their mission critical platform and help enhance end-user experience.
  • Wipro has won a multi-million dollar engagement with a US-based industrial manufacturing company to drive workplace transformation that delivers best-in-class end-user experience with an effective approach for mergers and acquisitions integrations.
  • Wipro has won an engagement with a leading US-based retail brokerage for a large integration program that includes modernizing and scaling applications across its multiple lines of business.
  • A technology-driven travel marketplace has selected Wipro as its strategic partner to modernize its core travel platform and help set up a capability hub in Mexico. The modernized platform will significantly enhance customer experience and help generate new revenue streams for the customer.

 
Digital Services Highlights
We continue to see increasing traction in digital oriented and other strategic deals as illustrated below:

  • A large, Brazil-based water and waste management company has awarded Wipro a strategic engagement to transform their internal processes, improve operational efficiency, and enhance competitiveness leveraging Wipro FullStride Cloud Services.
  • A leading US-based Cloud Security and Identity Governance solutions provider has selected Wipro to develop demanding functionalities and enhancements to support their core Product Development function. Wipro will help the customer meet growing demands, enable a quicker time to market and scale their software business globally.
  • A leading US-based financial advice firm has selected Wipro and Capco as strategic partners to deliver multiple digital transformation programs. Together with Capco, Wipro will lead an innovation program to facilitate greater adoption of new technologies to accelerate the company’s digital transformation journey.
  • Wipro has won an engagement with a US-based multi-state healthcare organization to deliver modernized member services. Wipro will leverage a new cloud-based, globalized contact center service delivery model to digitally transform and optimize stakeholder experience and ensure cost savings, quality, compliance and growth for the customer.
     

Analyst Recognition
 

  • Wipro has been recognized as a Leader for the second consecutive time in the 2021 Gartner® Magic Quadrant™ for Managed Network Services (Ted Corbett et al., 10 Nov 2021)
  • Wipro positioned as a Leader in The Forrester Wave™: Data Management Service Providers, Q4 2021
  • Wipro was featured in the Top 3 players in HFS Top 10: Life Sciences Service Providers 2021
  • Wipro was featured in the Top 4 players in HFS Top 10: Energy Services 2021
  • Wipro was rated as a Leader in Avasant High-Tech Industry Digital Services 2021–2022 RadarView
  • Wipro was positioned as a Leader in IDC MarketScape: Worldwide Salesforce Implementation Services 2021 Vendor Assessment (Doc  # US47073921, Nov 2021)
  • Wipro was rated as a Leader and Star Performer in Everest Group’s Enterprise Quality Assurance (QA) Services PEAK Matrix® Assessment 2022
  • Wipro was recognized as a Leader in Everest Group’s Cloud Services PEAK Matrix® Assessment 2022 – Europe, North America
  • Wipro was recognized as a Leader in Everest Group’s Advanced Analytics and Insights (AA&I) Services PEAK Matrix® Assessment 2022
  • Wipro ranks among the Top Service Providers in Customer Satisfaction and Innovation categories in Whitelane & Navisco Germany IT Outsourcing Study 2021
  • Wipro ranks among the Top Service Providers in Customer Satisfaction and Innovation categories in Whitelane French IT Outsourcing Study 2021
  • Wipro was recognized as a Leader in Everest Group’s Intelligent Automation in Healthcare – Solutions PEAK Matrix® Assessment 2022

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 1.8 billion ($23.8 million1)
  • IT Products Segment Results for the quarter was a profit of Rs 0.1 billion ($1.3 million1)

 
India business from State Run Enterprises (ISRE)

  • India SRE Segment Revenue for the quarter was Rs 1.6 billion ($21.8 million1)
  • India SRE Segment Results for the quarter was a profit of Rs 0.1 billion ($1.8 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, 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 (08:45 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=WIP20220112
 
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 220,000 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 74.39, as published by the Federal Reserve Board of Governors on December 31, 2021. However, the realized exchange rate in our IT Services business segment for the quarter ended December 31, 2021 was US$1= Rs 76.12
  2. Constant currency revenue for a period is the product of volumes in that period times the average actual exchange rate of the corresponding comparative period
  3. IT Services Operating Margin refers to Segment Results Total as reflected in IFRS financials

 

WIPRO LIMITED AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Rs  in millions, except share and per share data, unless otherwise stated)
               
      As at March 31, 2021   As at December 31, 2021
              Convenience translation into US dollar in millions
 Refer footnote 1
ASSETS              
Goodwill     139,127    242,945    3,266 
Intangible assets     13,085    44,320    596 
Property, plant and equipment     85,192    90,248    1,213 
Right-of-Use assets     16,420    18,445    248 
Financial assets              
Derivative assets      16    35    ^
Investments      10,576    17,543    236 
Trade receivables      4,358    1,301    17 
Other financial assets     6,088    6,052    81 
Investments accounted for using the equity method     1,464    775    10 
Deferred tax assets     1,664    2,357    32 
Non-current tax assets     14,323    10,222    137 
Other non-current assets     15,935    12,377    166 
Total non-current assets     308,248    446,620    6,002 
Inventories     1,064    1,025    14 
Financial assets              
Derivative assets     4,064    5,277    71 
Investments     175,707    235,740    3,169 
Cash and cash equivalents     169,793    107,458    1,445 
Trade receivables     94,298    122,365    1,645 
Unbilled receivables     27,124    38,908    523 
Other financial assets     7,245    9,608    129 
Contract assets     16,507    16,680    224 
Current tax assets     2,461    4,185    56 
Other current assets     24,923    29,504    397 
Total current assets     523,186    570,750    7,673 
               
TOTAL ASSETS     831,434    1,017,370    13,675 
               
EQUITY              
Share capital     10,958    10,962    147 
Share premium     714    1,304    18 
Retained earnings     466,692    555,789    7,471 
Share-based payment reserve     3,071    4,094    55 
SEZ Re-investment reserve     41,154    44,167    594 
Other components of equity     30,506    37,609    506 
Equity attributable to the equity holders of the Company     553,095    653,925    8,791 
Non-controlling interests     1,498    446   
TOTAL EQUITY     554,593    654,371    8,797 
               
LIABILITIES              
Financial liabilities              
Loans and borrowings     7,458    55,417    745 
Derivative liabilities        –        ^
Lease liabilities      13,513    15,056    202 
Other financial liabilities     2,291    3,676    49 
Deferred tax liabilities     4,633    14,989    201 
Non-current tax liabilities     11,069    14,520    195 
Other non-current liabilities     7,835    8,238    111 
Provisions          ^
Total non-current liabilities     46,801    111,903    1,503 
Financial liabilities              
Loans, borrowings and bank overdrafts     75,874    78,501    1,055 
Derivative liabilities     1,070    340   
Trade payables and accrued expenses     78,870    87,506    1,175 
Lease liabilities     7,669    8,647    116 
Other financial liabilities     1,470    3,906    53 
Contract liabilities     22,535    28,161    379 
Current tax liabilities     17,324    18,992    255 
Other current liabilities     24,552    24,238    326 
Provisions     676    805    11 
Total current liabilities     230,040    251,096    3,375 
TOTAL LIABILITIES     276,841    362,999    4,878 
               
TOTAL EQUITY AND LIABILITIES     831,434    1,017,370    13,675 
^ 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,
      2020   2021   2021   2020   2021   2021
              Convenience translation into US dollar in millions
 Refer footnote 1
          Convenience translation into US dollar in millions
 Refer footnote 1
Revenues     156,700    203,136    2,731    456,976    582,334    7,828 
Cost of revenues     (104,313)   (142,778)   (1,919)   (313,400)   (407,907)   (5,483)
Gross profit     52,387    60,358    812    143,576    174,427    2,345 
                           
Selling and marketing expenses     (11,326)   (13,988)   (189)   (30,721)   (40,857)   (549)
General and administrative expenses     (7,814)   (12,036)   (162)   (25,997)   (33,854)   (455)
Foreign exchange gains/(losses), net     566    1,187    16    2,109    3,280    44 
Other operating income/(loss), net     –      14    ^   (81)   2,179    29 
Results from operating activities     33,813    35,535    477    88,886    105,175    1,414 
                           
Finance expenses     (1,400)   (1,403)   (19)   (3,966)   (3,608)   (49)
Finance and other income     5,975    3,578    48    16,465    12,311    165 
Share of net profit/ (loss) of associates accounted for using the equity method     101    76      126    73   
Profit before tax     38,489    37,786    507    101,511    113,951    1,531 
Income tax expense     (8,524)   (8,063)   (108)   (22,590)   (22,547)   (303)
Profit for the period     29,965    29,723    399    78,921    91,404    1,228 
                           
Profit attributable to:                          
Equity holders of the Company     29,667    29,690    399    78,225    91,318    1,227 
Non-controlling interests      298    33    ^   696    86   
Profit for the period     29,965    29,723    399    78,921    91,404    1,228 
                           
Earnings per equity share:                          
Attributable to equity holders of the Company                          
Basic     5.21    5.43    0.07    13.74    16.71    0.22 
Diluted     5.17    5.42    0.07    13.46    16.67    0.22 
                           
Weighted average number of equity shares                          
used in computing earnings per equity share                          
Basic     5,696,798,493    5,467,954,878    5,467,954,878    5,694,731,405    5,465,359,077    5,465,359,077 
Diluted     5,741,070,466    5,481,204,821    5,481,204,821    5,812,779,105    5,478,766,612    5,478,766,612 
^ Value is less than 1                          

Additional Information:
 

Particulars Three months ended  Nine months ended Year ended
December
31, 2021
September
30, 2021
December
31, 2020
December
31, 2021
December
31, 2020
March
31, 2021
Audited Audited Audited Audited Audited Audited
Revenue            
IT Services            
Americas 1 56,644  53,205  45,015  159,532  131,581  178,091 
Americas 2 61,076  59,260  44,702  175,441  133,346  179,821 
Europe 59,620  58,619  42,880  172,700  120,334  165,441 
APMEA 23,596  22,715  20,717  67,543  61,637  82,462 
Total of IT Services 200,936  193,799  153,314  575,216  446,898  605,815 
IT Products 1,767  1,894  1,563  4,972  5,568  7,685 
ISRE 1,623  1,867  2,388  5,427  6,610  8,912 
Reconciling Items (3) 47  (1) 13 
Total Revenue 204,323  197,607  157,266  585,614  459,085  622,425 
             
Other operating income/(loss), net            
IT Services 14  15  –    2,179  (81) (81)
Total Other operating income/(loss), net 14  15      2,179  (81) (81)
             
Segment Result            
IT Services            
Americas 1 11,390  10,521  8,075  31,290  23,177  33,040 
Americas 2 12,057  11,819  10,190  35,226  31,089  41,589 
Europe 9,172  9,186  9,283  26,683  22,969  31,673 
APMEA 2,483  3,028  2,778  8,577  8,402  11,476 
   Unallocated 173  (156) 2,945  73  3,896  5,153 
Other operating income/(loss), net 14  15  –    2,179  (81) (81)
Total of IT Services 35,289  34,413  33,271  104,028  89,452  122,850 
IT Products 96  94  78  137  (100) 45 
ISRE 134  393  471  1,002  474  1,061 
Reconciling Items 16  20  (7) (940) (903)
Total 35,535  34,920  33,813  105,175  88,886  123,053 
Finance expenses (1,403) (1,459) (1,400) (3,608) (3,966) (5,088)
Finance and Other Income 3,578  4,114  5,975  12,311  16,465  20,912 
Share of net profit/ (loss) of associates accounted for using the equity method 76  (10) 101  73  126  130 
Profit before tax 37,786  37,565  38,489  113,951  101,511  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 December 31, 2021
IT Services Revenue as per IFRS                                                          $         2,639.7
Effect of Foreign currency exchange movement                                    $              17.2
Non-GAAP Constant Currency IT Services Revenue based on             $         2,656.9
previous quarter exchange rates                     
 
Three Months ended December 31, 2021
IT Services Revenue as per IFRS                                                         $          2,639.7
Effect of Foreign currency exchange movement                                   $              21.2
Non-GAAP Constant Currency IT Services Revenue based on             $         2,660.9
exchange rates of comparable period in previous year