Wipro Limited Announces Results for the Quarter and Year ended March 31, 2019 under IFRS

Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for the quarter and year ended March 31, 2019.

Highlights of the Results

Results for the Year ended March 31, 2019:

  • Gross Revenue was Rs 585.8 billion ($8.5 billion1), an increase of 7.5% YoY
  • IT Services Segment Reported Revenue was $8,120.3 million and grew at Adjusted2 YoY growth of 3.8%
  • Adjusted2 Non-GAAP3 constant currency IT Services Segment Revenue grew 5.4% YoY
  • IT Services Operating Margin4 for the year was 17.9%, an expansion of 1.8% YoY
  • Net Income was Rs 90.0 billion ($1.3 billion1), an increase of 12.4% YoY
  • EPS for the year was Rs 14.99 per share, a growth of 18.6% YoY
  • Board approves Buyback proposal of Rs 105 billion ($1.5 billion1) at a buyback price of Rs 325 ($4.71)

Results for the Quarter ended March 31, 2019:

  • Gross Revenue was Rs 150.1 billion ($2.2 billion1), an increase of 9.0% YoY
  • IT Services Segment Revenue was $2,075.5 million, a growth of 1.4% QoQ
  • Non-GAAP3 constant currency IT Services Segment Revenue grew by 1.0% QoQ. Adjusted2 Non-GAAP3 constant currency IT Services Segment Revenue grew 6.9% YoY
  • IT Services Operating Margin4 for the quarter was at 19.0%, an increase of 4.4% YoY
  • Net Income for the quarter was Rs 24.8 billion ($359.1 million1), an increase of 37.7% YoY
  • EPS for the quarter was Rs 4.13 per share, a growth of 37.7% YoY

Performance for the quarter & year ended March 31, 2019

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Abidali Z. Neemuchwala, CEO and Executive Director said, Our teams have executed well on our strategy which has resulted in consistent improvement of YoY growth each quarter. We have built a strong foundation for growth on the back of healthy order book and continued investments in big bet areas of Digital, Cyber security, Engineering services and Cloud. Our customers find these investments relevant as part of their digital transformation and IT Operations landscape modernization, enabling us to win in the market.

Jatin Dalal, Chief Financial Officer said, Our rigor in execution and focus on improved quality of revenues has resulted in Operating Margins expansion of 1.8% for the year. Our Operating Cash Flows was robust and 129.2% of our Net Income for the year. The announcement to buyback equity shares is part of our philosophy to deliver efficient returns to shareholders.

Outlook for the Quarter ending June 30, 2019

We expect Revenue from our IT Services business to be in the range of $2,046 million to $2,087 million*. This translates to a sequential growth of -1.0% to 1.0% excluding the impact of the divestment of our Workday and Cornerstone On Demand business which was concluded in the quarter ended March 31, 2019.

* Outlook is based on the following exchange rates: GBP/USD at 1.32, Euro/USD at 1.14, AUD/USD at 0.71, USD/INR at 70.16 and USD/CAD at 1.33

Capital Allocation

  • The Board of Directors approved a buyback proposal, subject to the approval of shareholders through postal ballot, for purchase by the company of up to 323.1 million equity shares of Rs 2 each (representing 5.35% of total paid up equity capital) from the shareholders of the company on a proportionate basis by way of a tender offer. The buyback price is Rs 325 ($4.71) per equity share payable in cash for an aggregate amount not exceeding Rs 105 billion ($1.5 billion1).
  • Further to the announcement on January 18, 2019, the Company, during the quarter ended March 31, 2019, allotted Bonus equity shares of Rs 2/- each in the ratio of 1:3 (one bonus share for every three shares held) to the shareholders of the Company who were on the Register of Members of the Company as on March 7, 2019, which was the Record Date fixed by the Board of the Directors for this purpose.
  • The Board of Directors at its meeting held on January 18, 2019, had declared an interim dividend of Rs 1 per equity share for the financial year 2018“19. The Board recommends adoption of the interim dividend as the final dividend for the financial year 2018“19. Thus, the total dividend for the financial year 2018“19 remains Rs 1 per equity share.

IT Services

Wipro continued its momentum in winning large deals globally as described below:

  • A leading North American financial services company has awarded a contract to Wipro to transform its security products suite. The multi-year engagement, powered by Wipro HOLMESTM, will help the client achieve operational agility for the adoption of new-age cyber security tools and enhance its security compliance framework.
  • A global technology company has selected Wipro to design and deliver a new level of experience for support services enterprise agility and modernizing core IT systems by leveraging Wipro HOLMESTM and third party cloud provider.
  • A leading Europe-headquartered manufacturer has awarded a multi-year digital workplace transformation contract to Wipro to drive employee productivity and cost optimization. The engagement will leverage Wipros LiVE WorkspaceTM platform and automation and AI capabilities to enable next-generation digital workplace services for the client.
  • Wipro has won an applications management contract from a European power company. The multi-year engagement will help the client carry out secure and efficient electricity trade.
  • A global consumer packaged goods company has awarded a cloud and IT infrastructure services contract to Wipro encompassing cloud hosting, applications, desktop virtualization, end user computing and cloud service integration and management.

Digital & Cloud Application Services Highlights

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

  • Wipro’s design-led value proposition, anchored by Wipro Digital and Designit, has secured a multi-year contract from a large North American healthcare company to reimagine their IT service desk and employee experience. The engagement will also leverage the Wipro HOLMESTM platform.
  • Wipro Digital has been selected to modernize a software-as-a-service e-mail security solution for a global technology company by rebuilding its user interface and other components.
  • Drawing on Wipro’s agile way of working and no-shore delivery model, a US retailer has awarded Wipro Digital a contract to build their next generation enterprise content management system that will allow them to create and scale customer experience, across channels through effective digital asset management.

Analyst Accolades and Awards

  • Wipro was recognized as the 2018 Citrix Cloud Partner of the Year for the India and ANZ regions for helping customers define their cloud journey in the area of digital workspace
  • Wipro was positioned as a Leader in Gartner Magic Quadrant for Managed Workplace Services, North America. Daniel Barros, Mark Ray, January 14, 2019
  • Wipro was positioned as a Leader in Gartner Magic Quadrant for Public Cloud Infrastructure Professional and Managed Services, Worldwide, Craig Lowery et al.,February 26, 2019
  • Wipro was positioned as a Leader in Gartner Magic Quadrant for CRM and Customer Experience Implementation Services, Worldwide, Patrick Sullivan, Ed Thompson, February 7 2019
  • Wipro was recognized as a Leader in The Forrester Wave„¢: Global Continuous Testing Service Providers, Q1 2019
  • Wipro was ranked among the HFS Top 10 High-Tech Service Providers 2019
  • Wipro was featured as a leading service provider in the HFS Top 10 Healthcare Services 2018
  • Wipro was recognized as a Leader by Everest Group in Banking BPO Digital Capability Platform Service Provider Landscape PEAK Matrix„¢ Assessment 2019
  • Wipro was recognized as Leader by Everest Group in Application Automation Services PEAK Matrix„¢ Assessment 2019

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 Gartners 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 2.8 billion ($39.9 million1).
  • IT Products Segment Revenue for the year was Rs 12.3 billion ($178.0 million1).
  • IT Products Operating Margin for the quarter was -3.4% and -8.5% for the year.

India business from State Run Enterprises (SRE)

  • India SRE Segment Revenue for the quarter was Rs 1.8 billion ($25.8 million1).
  • India SRE Segment Revenue for the year was Rs 8.5 billion ($123.5 million1).
  • India SRE Operating Margin for the quarter was “43.4% and -21.4% for the year

Please refer the table on 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 and year ended March 31, 2019, 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/wipro190416.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

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 175,000 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 Wipros beliefs regarding future events, many of which are by their nature, inherently uncertain and outside Wipros control. Such statements include, but are not limited to, statements regarding Wipros 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 companys 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 = Rs69.16, as published by the Federal Reserve Board of Governors on March 31, 2019. However, the realized exchange rate in our IT Services business segment for the quarter ended March 31, 2019 was US$1 = Rs70.28 2. The YoY growth rates for quarter and year ended March 31, 2019 have been computed by adjusting revenues for the divestment of our hosted data center services business. 3. 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. 4. 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,
2018   2019   2019
   

Convenience translation into US dollar in millions (Refer Footnote 1)

ASSETS

Goodwill 117,584 116,980 1,691
Intangible assets 18,113 13,762 199
Property, plant and equipment 64,443 70,601 1,021
Financial assets
Derivative assets 41 173 3
Investments 7,668 6,916 100
Investment in equity accounted investee 1,206 1,235 18
Trade receivables 4,446 4,373 63
Other financial assets 4,186 5,146 74
Deferred tax assets 6,908 5,604 81
Non-current tax assets 18,349 20,603 298
Other non-current assets 11,540 15,872 229
Total non-current assets 254,484 261,265 3,777
Inventories 3,370 3,951 57
Financial assets
Derivative assets 1,232 4,931 71
Investments 249,094 220,716 3,191
Cash and cash equivalents 44,925 158,529 2,292
Trade receivables 100,990 100,489 1,453
Unbilled receivables 42,486 22,880 331
Other financial assets 7,429 14,611 211
Contract assets 15,038 217
Other current assets 23,167 23,086 334
Current tax assets 6,262 7,435 108
478,955 571,666 8,265
Assets held for sale 27,201 240 3
Total current assets 506,156 571,906 8,268
TOTAL ASSETS 760,640 833,171 12,045
 

EQUITY

Share capital 9,048 12,068 174
Share premium 800 533 8
Retained earnings 453,265 534,700 7,731
Share based payment reserve 1,772 2,617 38
Other components of equity 18,051 18,198 263
Equity attributable to the equity holders of the Company 482,936 568,116 8,214
Non-controlling interest 2,410 2,637 38
TOTAL EQUITY 485,346 570,753 8,252

LIABILITIES

Financial liabilities
Long – term loans and borrowings 45,268 28,368 410
Derivative liabilities 7
Other financial liabilities 7
Deferred tax liabilities 3,059 3,417 49
Non-current tax liabilities 9,220 11,023 159
Other non-current liabilities 4,223 5,258 76
Provisions 3 2
Total non-current liabilities 61,787 48,068 694
Financial liabilities
Loans, borrowings and bank overdrafts 92,991 71,099 1,028
Derivative liabilities 2,210 1,310 19
Trade payables and accrued expenses 68,129 88,304 1,277
Other financial liabilities 1,050 644 9
Contract liabilities 17,139 24,768 358
Current tax liabilities 9,417 9,541 138
Other current liabilities 15,563 18,046 261
Provisions 796 638 9
207,295 214,350 3,099
Liabilities directly associated with assets held for sale 6,212
Total current liabilities 213,507 214,350 3,099
TOTAL LIABILITIES 275,294 262,418 3,793
TOTAL EQUITY AND LIABILITIES 760,640 833,171 12,045
 
 
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 March 31,   Year ended March 31,
2018   2019   2019 2018   2019   2019
   

Convenience translation into US dollar in millions (Refer footnote 1)

   

Convenience translation into US

dollar in millions (Refer Footnote 1)

Gross Revenues 137,686 150,063 2,170 544,871 585,845 8,471
Cost of revenues (97,794 ) (106,942 ) (1,546 ) (385,575 ) (413,033 ) (5,972 )
Gross profit 39,892 43,121 624 159,296 172,812 2,499
 
Selling and marketing expenses (11,263 ) (10,994 ) (159 ) (42,349 ) (44,510 ) (644 )
General and administrative expenses (9,801 ) (6,669 ) (96 ) (34,141 ) (35,951 ) (520 )
Foreign exchange gains/(losses), net 557 316 5 1,488 3,215 46
Other operating income   1,546   22     4,344   63  
Results from operating activities 19,385 27,320 396 84,294 99,910 1,444
 
Finance expenses (1,564 ) (2,530 ) (37 ) (5,830 ) (7,375 ) (107 )
Finance and other income 4,803 7,228 105 23,999 22,923 331
Share of profit /(loss) of equity accounted investee (3 ) (17 )   11   (43 ) (1 )
Profit before tax 22,621 32,001 464 102,474 115,415 1,667
Income tax expense (4,615 ) (7,064 ) (102 ) (22,390 ) (25,242 ) (365 )
Profit for the period 18,006   24,937   362   80,084   90,173   1,302  
 
Profit attributable to:
Equity holders of the Company 18,028 24,833 359 80,081 90,031 1,300
Non-controlling interest (22 ) 104   3   3   142   2  
Profit for the period 18,006   24,937   362   80,084   90,173   1,302  
 
Earnings per equity share:
Attributable to equity share holders of the Company
Basic 3.00 4.13 0.06 12.64 14.99 0.22
Diluted 3.00 4.12 0.06 12.62 14.95 0.22
 
Weighted average number of equity shares
used in computing earnings per equity share
Basic 6,004,470,975 6,008,783,491 6,008,783,491 6,333,391,200 6,007,376,837 6,007,376,837
Diluted 6,015,874,721   6,023,959,306   6,023,959,306   6,344,482,633   6,022,304,367   6,022,304,367  
 

Additional Information:

         
Particulars Three months ended   Year ended

March 31, 2019

    December 31, 2018     March 31, 2018     March 31, 2019     March 31, 2018
      Audited     Audited     Audited     Audited     Audited
Revenue            
IT Services
BFSI 46,043 45,979 37,775 175,262 144,139
Health BU 19,288 19,241 18,559 75,081 74,136
CBU 23,667 22,875 19,676 89,313 77,914
ENU 18,628 18,996 16,620 72,830 67,841
TECH 18,402 19,104 19,158 76,591 73,947
MFG 11,551 11,981 11,647 46,496 46,081
COMM       8,286     8,480     7,834     32,680     33,658
Total of IT Services 145,865 146,656 131,269 568,253 517,716
IT Products 2,759 3,145 4,169 12,312 17,998
ISRE 1,787 1,713 2,850 8,544 10,694
Reconciling Items       (32)     (8)     (45)     (49)     (49)
Total Revenue       150,379     151,506     138,243     589,060     546,359
 
Other operating Income
IT Services 1,546 4,344
IT Products
ISRE                      
Total Other Operating Income       1,546             4,344    
 
Segment Result
IT Services
BFSI 9,649 9,095 6,256 33,831 24,549
Health BU 1,940 1,973 1,826 8,638 9,624
CBU 4,716 5,291 2,943 16,828 12,619
ENU 2,787 3,613 2,287 7,081 8,097
TECH 3,031 4,177 3,717 15,916 14,680
MFG 2,262 2,391 1,739 8,327 7,007
COMM 985 1,578 (749) 4,396 3,236
Unallocated 1,161 976 1,180 3,142 3,347
Other Operating Income       1,546             4,344    
Total of IT Services       28,077     29,094     19,199     102,503     83,159
IT Products (93) 212 48 (1,047) 362
ISRE (775) (686) 124 (1,829) 454
Reconciling Items       111     48     14     283     319
Total 27,320 28,668 19,385 99,910 84,294
Finance Expense (2,530) (1,627) (1,564) (7,375) (5,830)
Finance and Other Income 7,228 5,362 4,803 22,923 23,999
Share of profit/ (loss) of equity accounted investee       (17)     7     (3)     (43)     11
Profit before tax       32,001     32,410     22,621     115,415     102,474
 

IT Services: The IT Services segment primarily consists of IT Service offerings to customers organized by industry verticals. Effective April 1, 2018, consequent to change in organization structure, the Company reorganized its industry verticals. The Manufacturing (MFG) and Technology Business unit (TECH) are split from the former Manufacturing & Technology (MNT) business unit.

The revised industry verticals are as follows: Banking, Financial Services and Insurance (BFSI), Health Business unit (Health BU) previously known as Health Care and Life Sciences Business unit (HLS), Consumer Business unit (CBU), Energy, Natural Resources & Utilities (ENU), Manufacturing (MFG), Technology (TECH) and Communications (COMM). Key service offerings to customers includes software application development and maintenance, research and development services for hardware and software design, business application services, analytics, consulting, infrastructure outsourcing services and business process services.

Comparative information has been restated to give effect to the above changes.

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 services segment (ISRE): This segment consists of IT Services offerings to entities/ departments owned or controlled by 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 March 31, 2019

IT Services Revenue as per IFRS $ 2,075.5
Effect of Foreign currency exchange movement $ (7.6)

Non-GAAP Constant Currency IT Services Revenue based on previous quarter exchange rates

$ 2,067.9
 

Three Months ended March 31, 2019

IT Services Revenue as per IFRS $ 2,075.5
Effect of Foreign currency exchange movement $ 57.6

Non-GAAP Constant Currency IT Services Revenue based on exchange rates of comparable period in previous year

$ 2,133.1

 

Year ended March 31, 2019

IT Services Revenue as per IFRS $ 8,120.3
Effect of Foreign currency exchange movement $ 130.3

Non-GAAP Constant Currency IT Services Revenue based on Previous year exchange rates

$ 8,250.6

 

Contact for Investor Relations
Aparna Iyer
Phone:
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Abhishek Kumar Jain
Phone: +1 978 826 4700
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Contact for Media & Press
Vipin Nair
Phone:
+91-80-6142 6450
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