IT Services Revenue crossed $2 billion for the
quarter
Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today
announced financial results under International Financial Reporting
Standards (IFRS) for its quarter ended September 30, 2017.
Highlights of the
Results
- Gross Revenues of Wipro Limited were Rs
134.2 billion ($2.1 billion1).
- IT Services Segment Revenues in dollar
terms were $2,013.5 million, an increase of 2.1% sequentially
(Non-GAAP constant currency increase of 0.3% sequentially) and 5.1%
YoY (Non-GAAP constant currency increase of 2.8% YoY).
- IT Services Segment Profits2 were Rs
22.8 billion ($349 million1), an increase of 4.0%
sequentially.
- IT Services Margin for the quarter was
17.3%, as compared to 16.8% for the quarter ended June 30,
2017.
- Net Income3 for the quarter was Rs 21.9
billion ($336 million1), an increase of 5.5% sequentially and 6.0%
YoY.
Performance for the quarter ended
September 30, 2017
“We surpassed the milestone of $2 billion in quarterly revenues
for IT Services on the back of rigorous execution of our strategy,”
said Abidali Z. Neemuchwala, Chief Executive Officer and Member
of the Board. “Our unique Digital capabilities powered growth
in top clients and position us well to drive our clients’ digital
transformation.”
“Productivity gains generated by our HOLMES automation suite and
operational efficiencies overcame the incremental impact of wage
hikes and expanded IT Services margin to 17.3%,” said Jatin
Dalal, Chief Financial Officer.
Outlook for the Quarter ending December
31, 2017
We expect Revenues from our IT Services business to be in the
range of $2,014 million to $2,054 million*.
Capital Allocation
Update
- As disclosed earlier, on July 20, 2017
the Board approved a proposal for Buyback of up to 343.75 million
equity shares at a price of Rs 320 per equity share. The Buyback
proposal was subsequently approved by the shareholders through
postal ballot, the results of which were declared on August 30,
2017. The Buyback offer period will commence upon completion of
regulatory requirements.
IT Services
Wipro continued its momentum in winning large deals globally as
described below:
A leading US-based chemical manufacturing company has awarded an
IT applications and back office operations transformation contract
to Wipro. Wipro will leverage its intellectual properties and
technology solutions including Wipro HOLMES™ for this
engagement.
Wipro has won a multi-year engagement with a leading
multinational technology company to help deliver a software
platform with high quality and reduced time to market. Wipro will
support the client’s agile release model by driving automation,
data-driven prioritization and optimization.
Wipro has won a multi-year engagement with an automotive Tier-I
company for supporting and modernizing their IT infrastructure,
across their global locations. This program will leverage the Wipro
HOLMESTM artificial intelligence platform to improve end user
experience, reduce costs and drive innovation for the client.
Ooredoo Myanmar (OML), a telecom company, has selected Wipro as
its technology managed services partner. As part of the five-year
engagement, Wipro will manage Ooredoo’s IT infrastructure in an
agile delivery model and will leverage the Wipro HOLMESTM
artificial intelligence platform to drive hyper-automation. The
engagement will help enhance the client’s business and operational
agility, improve the time to market of their services and enhance
end-customer experience through improved Quality of Service.
An Asian transport and infrastructure government body has
selected Wipro as its strategic partner to develop and implement an
integrated payment and collection system.
Wipro worked with leading US based Apparel and Footwear
manufacturer to re-define their application support landscape
leveraging hyper automation through Wipro HOLMESTM, right shoring,
redefining the operating model and driving improved end-user
experience.
Digital highlights
Wipro continued its momentum in winning Digital deals globally
as described below:
Wipro has won a large IoT and IT infrastructure modernization
contract from a large Europe-based medical devices manufacturer.
The engagement will help the client improve the product and service
experience of their medical devices, across the globe, through
enhanced after-sales remote monitoring support and predictive
maintenance.
Wipro has won a large multi-year omni-channel customer
experience transformation engagement from a leading telecom company
in the APAC region. Wipro will leverage its digital engineering
capabilities to improve customer advocacy, issue resolution rates
and accelerate end-customers’ shift towards digital CRM and
self-help channels.
A global pharmaceutical company has selected Wipro Digital
to facilitate its transformation into a customer
centric organization that is able to create internal and
external value out of its vast amounts of health-related data.
Wipro will bring new skills and ways of working to the organization
aimed to imagine and launch innovative products based on data.
Wipro has been selected as the digital partner for a North
American bank for consolidating their Cards portfolio into a single
platform. The scope is end-to-end from planning to implementation.
The engagement will involve transformation using automation,
adoption of DevOps and Agile methodology.
Wipro has won an integrated cloud-based transformation deal,
from a leading Latin American conglomerate, as part of a multi-year
digital program. The engagement will involve simplifying commerce,
Procure2Pay and Human Capital Management processes.
Wipro won a number of deals across business verticals in the
cloud applications space leveraging Appirio Cloud Services. A
couple of examples are as below
- A US-based voluntary health
organization has selected Wipro as a lead partner to transform
customer experience.
- A renowned private research institute
has awarded Wipro a contract to build a new constituent management
system on Salesforce.
Delivery Excellence
“Wipro’s proactive approach to Problem Management and Quality
Assurance has added immeasurable value to our organization and has
allowed us to remain proactive and meet any industry challenges we
have faced. The close working relationship with Wipro has been very
beneficial to us and ensured that when new opportunities arise we
can deliver solutions in a timely manner. Culturally, Wipro is an
excellent fit to our organization with our shared common values of
integrity and sensitivity,” said Arnie Leap, Chief Information
Officer, 1-800-Flowers.com, Inc.
“Wipro manages a large portion of our IT real estate and is a
key player in our innovation ecosystem. Wipro’s process,
technological and domain maturity as a customer centric and SMART
IT organization has helped us build transformational capabilities
and incubate ideas that help us improve health outcomes &
enhance the experiences for our patients. We are planning to
actively leverage Wipro’s HOLMES as a mechanism to drive
experience, efficiency and economy across our value chain. As the
leading biotech focused on rare disease, our partnership with Wipro
has helped us unlock numerous business benefits while delivering
exceptional value to patients and caregivers struggling with a
life-altering condition,” said Gabriele Ricci, VP, Head of
Digital Health and Emerging Technology, Shire.
Analyst Accolades and
Awards
Wipro’s Open Banking API Platform won the 2017 API Awards at API
World under the ‘Travel APIs’ category. Open Banking APIs enable
banks / other financial value providers to gain insights into
customer’s banking habits and data, thereby providing contextual
suggestions for engagement.
Wipro is amongst the top 6 firms in the Constellation Research
shortlist on “Synchronous Ledger Tech (Blockchain) Companies to
Watch For”.
Wipro has been placed as a ‘Winner’ in three HfS Blueprints:
Digital Technology Strategy and Consultancy Services; Application
Development and Management Services 2017; and IT infra Management
and Enterprise Cloud Services.
Wipro has been placed as a ‘Winner’ in the HfS Application
Testing Services Supporting Digital Transformation Blueprint report
2017.
Wipro has been placed as a ‘Winner’ in the HfS Energy Operations
Blueprint Report 2017.
Wipro has been placed as a ‘Winner’ in the HfS Embedded and
Semiconductor Engineering Services Blueprint Report 2017.
IDC MarketScape has named Wipro as a ‘Leader’ in the IDC
MarketScape: Worldwide Cloud ERP Implementation Services 2017
Vendor Assessment (Doc #US41523417, July 2017).
Wipro has been positioned as a Leader by Everest Group, a global
independent consulting and research firm, in the PEAK Matrix™
Assessments for Automation in IT Application Dev-Test and Business
Process Service Delivery Automation (BPSDA).
IT Products
- Revenue for the quarter ended September
30, 2017 was Rs 3.0 billion ($46 million1).
- IT Products Margin for the quarter was
2.9%, as compared to 0.5% for the quarter ended June 30, 2017.
Please refer 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.
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 September 30, 2017, 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-
http://services.choruscall.eu/links/wipro171017.html
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.
All product names, logos, and brands are property of their
respective owners.
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 160,000
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.
* Guidance is based on the following exchange rates: GBP/USD at
1.34, Euro/USD at 1.19, AUD/USD at 0.81, USD/INR at 64.26 and
USD/CAD at 1.23.1. 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, 2017, for cable transfers in Indian Rupees, as
certified by the Federal Reserve Board of New York, which was US
$1= Rs 65.30. However, the realized exchange rate in our IT
Services business segment for the quarter ended September 30, 2017
was US$1= Rs 65.402. Segment Profit refers to Segment Results
Total.3. Net Income refers to ‘Profit for the period attributable
to equity holders of the Company’
Wipro limited and subsidiaries CONDENSED CONSOLIDATED
INTERIM STATEMENT OF FINANCIAL POSITION (Rupees in millions, except
share and per share data, unless otherwise stated)
As of March 31, As of Sep 30,
2017 2017 2017
Conveniencetranslation into
USdollar in millions(unaudited) -
Referfootnote 1
ASSETS
Goodwill 125,796 128,839 1,973 Intangible assets 15,922 20,571 315
Property, plant and equipment 69,794 71,803 1,100 Derivative assets
106 493 8 Investments 7,103 9,844 151 Investment in equity
accounted investee 407 6 Trade receivables 3,998 4,179 64
Non-current tax assets 12,008 15,037 230 Deferred tax assets 3,098
3,088 47 Other non-current assets 16,793 15,755 241
Total
non-current assets 254,618 270,016 4,135 Inventories
3,915 3,456 53 Trade receivables 94,846 99,887 1,530 Other current
assets 30,751 31,484 482 Unbilled revenues 45,095 45,435 696
Investments 292,030 333,056 5,100 Current tax assets 9,804 6,132 94
Derivative assets 9,747 2,352 36 Cash and cash equivalents 52,710
51,412 787
Total current assets 538,898 573,214 8,778
TOTAL ASSETS 793,516 843,230 12,913
EQUITY
Share capital 4,861 9,733 149 Share premium 469 2,231 34 Retained
earnings 490,930 529,496 8,109 Share based payment reserve 3,555
1,593 24 Other components of equity 20,489 19,397 297 Equity
attributable to the equity holders of the Company 520,304 562,450
8,613 Non-controlling interest 2,391 2,445 37
Total equity
522,695 564,895 8,650
LIABILITIES
Long - term loans and borrowings 19,611 31,152 477 Deferred tax
liabilities 6,614 7,464 114 Derivative liabilities 2 - -
Non-current tax liabilities 9,547 8,607 132 Other non-current
liabilities 5,500 4,605 71 Provisions 4 3 0
Total non-current
liabilities 41,278 51,831 794 Loans, borrowings and bank
overdrafts 122,801 114,210 1,749 Trade payables and accrued
expenses 65,486 69,640 1,066 Unearned revenues 16,150 16,040 246
Current tax liabilities 8,101 7,420 114 Derivative liabilities
2,708 3,530 54 Other current liabilities 13,027 14,642 224
Provisions 1,270 1,022 16
Total current liabilities 229,543
226,504 3,469
TOTAL LIABILITIES 270,821 278,335 4,263
TOTAL EQUITY AND LIABILITIES 793,516 843,230
12,913
Wipro limited and subsidiaries
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME (Rupees in
millions, except share and per share data, unless otherwise stated)
Three Months ended September 30,
Six Months ended September 30, 2016 2017 2017
2016 2017 2017
Conveniencetranslation into
USdollar in millions(unaudited) Referfootnote
1
Conveniencetranslation into
USdollar in millions(unaudited) Referfootnote
1
Gross revenues 137,657 134,234 2,056 273,649 270,495 4,142 Cost of
revenues (97,808 ) (94,694 ) (1,450 ) (194,197 ) (191,805 ) (2,937
)
Gross profit 39,849 39,540 606
79,452 78,690 1,205 Selling and
marketing expenses (9,614 ) (9,867 ) (151 ) (19,755 ) (20,013 )
(306 ) General and administrative expenses (8,545 ) (7,085 ) (109 )
(16,144 ) (14,349 ) (220 ) Foreign exchange gains/(losses), net
1,281 453 7 2,265 806 12
Results from operating
activities 22,971 23,041 353 45,818
45,134 691 Finance expenses (1,428 ) (1,386 )
(21 ) (2,764 ) (2,860 ) (44 ) Finance and other income 5,105 6,661
102 10,305 12,861 197 Share of profits/(loss) of equity accounted
investee - 5 - - 4 -
Profit before tax 26,648
28,321 434 53,359 55,139 844
Income tax expense (5,909 ) (6,426 ) (98 ) (12,031 ) (12,420
) (190 )
Profit for the period 20,739
21,895 336 41,328
42,719 654 Attributable
to: Equity holders of the company 20,672 21,917 336 41,190 42,682
653 Non-controlling interest 67 (22 ) - 138
37 1
Profit for the period
20,739 21,895 336 41,328 42,719
654
Earnings per equity
share: Attributable to equity share holders of the
company Basic 4.27 4.52 0.07 8.44 8.81 0.13 Diluted 4.26 4.52
0.07 8.42 8.80 0.13 Weighted average number of equity shares
used in computing earnings per equity share Basic 4,841,242,274
4,845,485,149 4,845,485,149 4,878,025,634 4,844,289,024
4,844,289,024 Diluted 4,853,625,288 4,852,992,546 4,852,992,546
4,890,933,302 4,852,340,224 4,852,340,224
Additional
Information Segment Revenue IT Services Business
Units BFSI 33,583 36,349 557 67,213 71,283 1,092 HLS 20,883
17,989 275 40,814 37,139 569 CBU 20,708 20,989 321 41,433 41,524
636 ENU 16,881 17,769 272 34,237 35,233 540 MNT 29,463 30,010 460
59,001 59,352 909 COMM 9,848 8,583 131
19,760 17,414 265
IT SERVICES TOTAL
131,366 131,689 2,016 262,458 261,945 4,011 IT PRODUCTS 7,666 2,988
47 13,596 9,331 143 RECONCILING ITEMS (94 ) 10 -
(140 ) 25 0 TOTAL 138,938 134,687
2,063 275,914 271,301
4,154
Segment Result IT Services Business
Units BFSI 6,379 6,055 93 13,373 11,496 176 HLS 3,234 2,698 41
6,090 5,432 83 CBU 3,584 3,244 50 7,359 6,178 95 ENU 3,443 3,435 53
6,468 7,086 109 MNT 6,175 5,400 83 12,129 10,575 162 COMM 1,594
1,147 18 3,096 2,596 40 OTHERS - - - UNALLOCATED (1,037 ) 805
11 (1,874 ) 1,337 20
TOTAL IT SERVICES 23,372 22,784 349 46,641 44,700 685 IT
PRODUCTS (298 ) 88 1 (666 ) 119 2 RECONCILING ITEMS (103 ) 169
3 (157 ) 315 5 TOTAL
22,971 23,041 353 45,818 45,134
691 FINANCE EXPENSE (1,428 ) (1,386 ) (21 )
(2,764 ) (2,860 ) (44 ) FINANCE AND OTHER INCOME 5,105 6,661 102
10,305 12,861 197 SHARE OF PROFIT/(LOSS) OF EQUITY ACCOUNTED
INVESTEE 5 - - 4 0
PROFIT BEFORE TAX 26,648 28,321 434 53,359 55,139 844 INCOME
TAX EXPENSE (5,909 ) (6,426 ) (98 ) (12,031 ) (12,420
) (190 )
PROFIT FOR THE PERIOD 20,739
21,895 336 41,328
42,719 654 Segment result
represents operating profits of the segments and dividend income
and gains or losses (net) relating to strategic investments, which
are presented within “Finance and other income” in the statement of
Income. The Company is organized by the following operating
segments; IT Services and IT Products.
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), Healthcare & Lifesciences (HLS),
Consumer Business Unit (CBU), Energy, Natural Resources &
Utilities (ENU), Manufacturing & Technology (MNT),
Communications (COMM). IT Services segment also includes Others
which comprises dividend income relating to strategic investments,
which are presented within “Finance and other income” in the
statement of Income. 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. In the IT
Products segment, 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 products, software licenses and other
related deliverables.
Reconciliation of Non-GAAP Constant Currency IT Services
Revenue to IT Services Revenue as per IFRS ($MN)
Three Months ended September 30,2017 IT Services
Revenue as per IFRS $ 2,013.5
IT Services Revenue as per IFRS
$ 2,013.5 Effect of Foreign currency exchange
movement $ (36.6 ) Effect of Foreign currency exchange
movement $ (44.1 ) Non-GAAP Constant Currency IT Services Revenue
based on previous quarter exchange rates $ 1,976.9
Non-GAAP Constant Currency IT Services Revenue based on previous
year exchange rates $ 1,969.4
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version on businesswire.com: http://www.businesswire.com/news/home/20171017006208/en/
Wipro LimitedContact for Investor RelationsPavan N RaoPhone:
+91-80-4672 6143pavan.rao@wipro.comorAbhishek Kumar JainPhone: +1
978 826 4700abhishekkumar.jain@wipro.comorContact for Media &
PressVipin NairPhone: +91-80-3991 6450vipin.nair1@wipro.com
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