STT State Street Corporation

BANGALORE, India and EAST BRUNSWICK, N.J., Oct. 31, 2011 /PRNewswire/ -- Wipro Limited (NYSE: WIT) today announced financial results under International Financial Reporting Standards (IFRS) for its second quarter ended September 30, 2011.

Highlights of the Results:

• IT Services Revenue was $1,472 million, a sequential increase of 4.6% and YoY increase of 15.7%.
• Non-GAAP constant currency revenue growth was 5.5% sequentially.
• Total Revenues were Rs.90.94 billion ($1.85 billion(1)), an increase of 18% YoY.
• Non-GAAP Adjusted Net Income was Rs.13.06 billion ($266 million(1)), an increase of 2% YoY. Net Income was Rs.13.01 billion ($265 million(1)), an increase of 1% YoY.
• IT Services Revenues were Rs.68.29 billion ($1.39 billion(1)), an increase of 7% sequentially and 19% YoY.
• IT Services Earnings Before Interest and Tax (EBIT) was Rs.13.64 billion ($278 million(1)), an increase of 7% YoY.
• Our Operating Income to Revenue for IT Services was 20% for the quarter.

Performance for the quarter ended September 30, 2011.

Azim Premji, Chairman of Wipro, commenting on the results said – "Macroeconomic sentiments continue to remain uncertain. We have seen growth momentum build up in our IT Business with healthy volume growth. Our focused investment strategy will get the business to a higher growth trajectory. "

Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro, said – "We are continuing to see incremental progress in our client mining strategy with 5 customers contributing more than $100 million of revenues and our top customer hitting a revenue run rate upwards of $200 million. We had an impact on operating margins in the quarter due to salary increases."

T K Kurien, Executive Director & Chief Executive Officer, IT Business, said – "We have had a strong quarter with Revenues ahead of the upper end of the guided range. We continue to build differentiation and business value through our focus on key themes – Variabilization, Consumerization, Performance Analytics and Innovation in a world of constraints."

Outlook for the Quarter ending December 31, 2011

We expect Revenues from our IT Services business to be in the range of $1,500 million to $1,530 million*.

* Guidance is based on the following exchange rates: GBP/USD at 1.60, Euro/USD at 1.40, AUD/USD at 1.04, USD/INR at 46.42.

IT Services (75% of Total Revenue and 92% of Operating Income for the quarter ended September 30, 2011)

The IT Services segment had 131,730 employees as of September 30, 2011, an increase of 5,240 people this quarter. We added 44 new customers for the quarter.

In the current macro-economic environment, corporations across the globe are looking to maximize the potential of technology deployments and are increasingly relying on business models and technologies to variabilize their IT spends, enabling more differentiating investment for IT based Innovation.

Wipro is seeing traction with clients on cloud and variabilized business model offerings. State Street Corporation (NYSE: STT), one of the world's leading providers of financial services to institutional investors, has entered into a multi-year agreement with Wipro to provide application maintenance and support services  Wipro will deploy pioneering 'lean' methodologies delivered through its award winning CIGMA platform for this IT transformation engagement.

A leading European Communications Services Provider has expanded its existing relationship with Wipro to its wholesale business, wherein Wipro will provide variabilized technical support services for the service provider's customers in the United Kingdom.

Wipro has partnered with a Leading Convenience Retailer to provide Infrastructure Management Services. Wipro will provide easily scalable hosting and data center operations services to meet the client's aggressive growth plans by applying proven tenets of variabilization such as standardization and simplification to drive efficiency and optimize delivery.

Wipro won an order from UIDAI (Unique Identification Authority of India) for setting up computing and storage platform for 100 million Aadhaar numbers. Wipro also signed contracts with UIDAI for Data Center hosting services, specialized consulting and manpower services.

Awards and accolades

Wipro Technologies achieved Diamond Level Status, the highest ranking available, in Oracle Partner Network (OPN) Specialized program and has been recognized for expertise and co-development efforts across the Oracle Stack and continued commitment to joint customer success.

Wipro Technologies' Mobile-Trust Framework won the 3rd Annual 2011 Golden Bridge Awards for Mobile Security Solutions category.

IT Products (11% of Total Revenue and 3% of Operating Income for the quarter ended September 30, 2011)

• Our IT Products segment recorded Revenue of Rs.10 billion ($204 million(1)) for the quarter ended September 30, 2011 a decline by 6% YoY.
• EBIT was Rs.451 million ($9 million(1)) for the quarter, a decline of 15% YoY.
• The ratio of our Operating Income to Revenue for this segment was 4.5% for the quarter.

Consumer Care and Lighting (9% of Total Revenue and 6% of Operating Income for the

quarter ended September 30, 2011)

• Our Consumer Care and Lighting business segment recorded Revenue of Rs.8 billion ($163 million(1)) for the quarter ended September 30, 2011, representing an increase of 20% YoY.
• EBIT was Rs.882 million ($18 million(1)) for the quarter, an increase of 6% YoY.  
• Operating Income to Revenue for this segment was 11% for the quarter.

Wipro Limited

• Total Revenue for the quarter ended September 30, 2011 was Rs.90.94 billion ($1.85 billion(1)) representing an increase of 18% over the same period last year.
• Net Income for the quarter ended September 30, 2011 was Rs.13.01 billion ($265 million(1)) representing an increase of 1% over the same period last year.
• Non-GAAP Adjusted Net Income (excluding impact of accelerated amortization of stock based compensation) for the quarter ended September 30, 2011 was Rs.13.06 billion ($266 million(1)) representing an increase of 2% over the same period last year.

Please see the table on page 7 for a reconciliation between (i) IFRS Net Income and non-GAAP Adjusted Net Income (excluding the impact of stock-based compensation) and (ii) 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 on page 7 provides Adjusted Net Income for the period, which is a non-GAAP measure that excludes the impact of accelerated amortization in respect of stock options that vest in a graded manner, and IT Services Revenue on a constant currency basis, which is a non-GAAP 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 consider a stock option award with a graded vesting schedule to be in substance a single award not multiple stock option awards and accordingly believe the straight line amortization reflects the economic substance of the award. 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. We believe that the presentation of this Non-GAAP Adjusted Net Income, when shown in conjunction with the corresponding IFRS measure, provides useful information to investors and management regarding financial and business trends relating to its Net Income for the period

These 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. In addition to these 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.

For internal budgeting process, our management also uses financial statements that exclude the impact of accelerated amortization relating to stock options that vest in a graded manner. Management of the Company also uses Non-GAAP Adjusted Net Income, in addition to the corresponding IFRS measure, in reviewing our financial results.

Results for the year ended September 30, 2011, computed under IFRS, along with individual business segment reports, are available in the Investors section of our website at www.wipro.com.

Quarterly Conference Calls

We will hold a conference call today at 02:00 p.m. Indian Standard Time (04:30 a.m. US Eastern Time) and at 6:45 p.m. Indian Standard Time (9:15 a.m. US Eastern Time) to discuss our performance for the quarter. 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 (NYSE: WIT)

Wipro provides comprehensive IT solutions and services, including systems integration, Information Systems outsourcing, IT enabled services, package implementation, software application development and maintenance, and research and development services to corporations globally.   Wipro Limited is the first PCMM Level 5 and SEI CMM Level 5 certified IT Services Company globally. Wipro also has a strong presence in niche market segments of Infrastructure Engineering and Consumer Products & Lighting.  

For more information, please visit our websites at www.wipro.com.

Forward-looking and Cautionary 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, 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 reader, the amounts in Indian rupees in this release have been translated into United States dollars at the noon buying rate in New York City on September 30, 2011, for cable transfers in Indian rupees, as certified by the Federal Reserve Board of New York, which was US $1= Rs.49.05. However, the realized exchange rate in our IT Services business segment for the quarter ended September 30, 2011 was US$1= Rs.46.38

SOURCE Wipro Limited