Categories: Business Wire India Technology

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

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

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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

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