Wipro Limited Announces Results for the Quarter Ended June 30, 2021 Under IFRS

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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.
 

  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 74.33, 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
  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 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