Net Income grew 7% YoY
IT Services Revenue grew 3.1% in constant
currency
Wipro Limited (NYSE:WIT) today announced financial
results under International Financial Reporting Standards (IFRS)
for its second quarter ended September 30, 2015.
Highlights of the
Results:
- Gross Revenues were Rs 125.1 billion
($1.9 billion1), an increase of 7% YoY.
- Net Income2 was Rs 22.4 billion ($341
million1), an increase of 7% YoY.
- IT Services Segment Revenue was
$1,831.9 million, a sequential increase of 2.1%
- Non-GAAP constant currency IT Services
Segment Revenue in dollar terms grew 3.1% sequentially and grew
8.4% YoY
- IT Services Segment Revenue was Rs
120.4 billion ($1,838.6 million1), an increase of 10% YoY.
- IT Services Segment Profit3 was Rs 25.0
billion ($381 million1), an increase of 4% YoY.
- IT Services Segment Margins was 20.7%
for the quarter.
- Headcount increased by 6,607 to
168,396.
Performance for the quarter ended
September 30, 2015
T K Kurien, Member of the Board & Chief Executive Officer
of Wipro, said – “During the quarter, we grew IT Services
Revenues in dollar terms by 3.1% in constant currency and
maintained margins in a narrow range. Wipro Digital, strengthened
uniquely by the addition of Designit, with both strategic design
process capability along with Wipro’s technological capability is
positioning us uniquely as an integrated design and technology
player. Wipro HOLMESTM, our cognitive intelligence platform, is
engaged in 12 projects in business-critical areas for marquee
customers and positioning Wipro favorably in the marketplace.”
Jatin Dalal, Chief Financial Officer of Wipro, said –
“Our investments in next-gen delivery practices generated
productivity to significantly mitigate the impact of wage hikes and
utilization on operating margins. The impact of cross-currency on
operating margins were compensated by the benefits from rupee
depreciation.”
Outlook for the Quarter ending December
31, 2015
We expect Revenues from our IT Services business to be in the
range of $1,841 million to $1,878 million*.
* Guidance is based on the following exchange rates: GBP/USD at
1.55, Euro/USD at 1.12, AUD/USD at 0.72, USD/INR at 65.34 and
USD/CAD at 1.33
IT Services
The IT Services segment had a headcount of 168,396 as of
September 30, 2015. We added 67 new customers during the
quarter.
Wipro sustained its momentum in winning Large Deals globally
as described below:
One of Wipro’s largest oil & gas supermajor customers
extended the scope of its engagement with the company in its
Downstream segment and in Global Functions. The long standing
engagement now incorporates application management services for the
customer’s refineries and petrochemical plants around the world and
across all its global functions.
Wipro has been selected by a leading automotive tier 1 company
in the U.S. as a preferred supplier of Embedded Engineering
Services to assist in the development of their existing and
advanced technologies in the areas of the Connected Car. Through
this engagement, Wipro will assist the client to develop advance
technology to support their entry into new market segments
including next generation infotainment systems, human machine
interfaces, heads-up displays and advance driver assist
systems.
Wipro has won a multi-year engagement with a world renowned
airline that represents both a renewal of existing business as well
as a foray into new services to be provided from a new geography.
The transformational program enabled by Wipro will bring analytical
insights into the delivery of services to further enhance end-user
customer experience for the client.
A multi-national beverage company has chosen Wipro to upgrade
its IT infrastructure, provide end-to-end support for critical
business applications and support its IT operations.
Telenor entered into an understanding with Wipro to transform
its IT delivery model in two of its Asian operating companies. As
part of the engagement, Wipro will set up a IT Synergy services
model, to achieve significant efficiency in IT costs and service
delivery. Telenor selected Wipro for its global leadership in the
telecom industry and infrastructure services. The project is part
of Telenor`s ambition to realize a One-IT vision across its
operations in Asia.
Wipro has been selected by CIDCO of Maharashtra Ltd, an
undertaking of Govt. of Maharashtra, for a safe and smart city
project to deploy IT infrastructure and surveillance for the areas
under CIDCO administration between Kharghar and New Panvel in
Mumbai. This includes the installation and connectivity of 574
cameras across 293 locations that conduct automatic number plate
and speed detection. In addition, it also consists of other smart
city components like emergency calling booths, public address
systems, variable messaging signs, gunshot detection sensors,
parking availability information, and a centralised command
center.
Wipro has entered into a strategic engagement with Airtel for a
Big Data transformation project wherein Wipro will leverage new age
technology to build a next generation Data Ware Housing platform
based on Hadoop. In addition to the transformation of the existing
business intelligence ecosystem, Wipro will bring agility and
flexibility into the new platform to help Airtel achieve its
objectives of an enriched customer experience by giving customers
the best offers possible.
Digital highlights
Wipro has been chosen by Chelsea Football Club as its official
digital and IT partner. Chelsea FC, the reigning champions of the
English Premier League, is one of the earliest adopters of Digital
to engage and differentiate themselves - both as a team and as a
club. Wipro will support Chelsea FC in this transformation journey
by bringing together strategy, design and technology. Chelsea FC
will work with Wipro to create experiences for millions of fans
that span not only the in-stadium, game-day experience but also
their digital experience, anytime and anywhere.
Wipro would be developing a multi-cloud-based video distribution
workflow solution for an Over-the-Top (OTT) service provider that
would allow them to scale, increase reliability and geographic
reach. Wipro is enabling delivery of media services, leveraging
different cloud providers’ services and automating the cloud
provider selection decision. This would be a first in the OTT
industry for delivering media dynamically by leveraging different
cloud services provider, based on cost optimization, reliability
and scale.
Designit, the global strategic design firm that became part of
Wipro in the quarter ended September 30, 2015, continues to attract
leading global brands as they reimagine customer experience.
• Scandinavian Airlines has selected Designit to help the
airline rethink and redesign the future customer experience for its
large base of over 4 million frequent flyers.
• Designit has also been appointed by a major European
automotive brand to rethink and redesign its entire service
experience for customers that visit the brand’s dealerships for
maintenance and service work.
• Designit has been appointed by a global Pharmaceutical brand
to work on reimagining and improving its innovation process and to
take the brand on a journey to rethink the business offering beyond
the core pharmaceutical products of today and to drive the digital
business transformation of tomorrow.
Open Source Highlights
Wipro’s Open Source practice continued its momentum to win
strategic deals to help customers in their Open Source
transformation journey across industries. Some marquee wins include
digitization of “Diabetics Care” for a global healthcare
organization, transforming the retail banking digital touch points
for a global financial services organization and the migration of
applications from a legacy to open source platform as part of a
superannuation program for an insurance and banking
corporation.
Awards and accolades
Wipro’s Aftermarket Services Transformation practice from the
company’s Manufacturing & Hi-Tech SBU has been positioned as a
‘Leader’ by IDC, a leading consulting and research firm, in its
report titled “IDC MarketScape: Worldwide Manufacturing Service
Life-Cycle Management SI/BPO 2015 Vendor Assessment”. The report
highlights Wipro’s IP – Looking Glass Industrial Internet Platform,
depth of domain knowledge and partnership eco-system.
Wipro has been positioned as a ‘Leader’ by Everest Group, a
leading consulting and research firm, in its IT Outsourcing in Life
Sciences Industry – Service Provider Landscape with PEAK Matrix™
Assessment 2015 report for offering an integrated portfolio of
offerings for a connected healthcare ecosystem, with solutions
spanning patient access, HCP engagement, drug adherence, clinical
trials, analytics-based transformation, BPO, and marketing support
for mature brands.
Wipro has been cited as a 'Leader' and 'Star Performer' by
Everest Group in its recently released report 'IT Outsourcing in
Global Capital Markets – Service Provider Landscape with PEAK
Matrix™ Assessment 2015'.
Additionally, Wipro has been cited as a 'Leader' and 'Star
Performer' by Everest Group, in its recently released report
'Banking BPO – Service Provider Landscape with PEAK Matrix™
Assessment 2015'.
Everest Group also cited Wipro as a ‘Leader’ and 'Star
Performer' in its recently released report 'Everest PEAK Matrix™
Assessment 2015 for Independent Testing Services.
Wipro has been included in the Dow Jones Sustainability Index
(DJSI), World for the 6th consecutive year. Wipro is also a member
of the DJSI Emerging Markets Index. A total of 1845 companies were
assessed from around the world of which 317 have been chosen as the
DJSI (World) constituents for the year 2015-16; the IT Services
sector saw 76 companies participating globally of which 8 have been
selected in the World Index.
IT Products
- Our IT Products Segment delivered
Revenue of Rs 5.4 billion ($83 million1) for the quarter ended
September 30, 2015
Please refer to the table on page 7 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 on page 7 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, 2015, 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. 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 Limited (NYSE:WIT) is a leading Information Technology,
Consulting and Business Process Services company that delivers
solutions to enable its clients do business better. Wipro delivers
winning business outcomes through its deep industry experience and
a 360 degree view of "Business through Technology" - helping
clients create successful and adaptive businesses. A company
recognized globally for its comprehensive portfolio of services, a
practitioner's approach to delivering innovation, and an
organization wide commitment to sustainability, Wipro has a
workforce of over 150,000, serving clients in 175+ cities across 6
continents
For more information, please visit www.wipro.com
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, 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.
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 September 30,
2015 2015 2015
Convenience translation into
US dollar in millions (unaudited) - Refer
footnote 1 on Page 1
ASSETS
Goodwill 68,078 75,246 1,149 Intangible assets 7,931 8,740 133
Property, plant and equipment 54,206 57,403 876 Derivative assets
736 302 5 Available for sale investments 3,867 4,374 67 Non-current
tax assets 11,409 11,551 176 Deferred tax assets 2,945 4,094 63
Other non-current assets 14,369 13,772 210
Total non-current
assets 163,541 175,482 2,679 Inventories 4,849 5,571 85
Trade receivables 91,531 96,539 1,474 Other current assets 73,359
94,199 1,438 Unbilled revenues 42,338 47,806 730 Available for sale
investments 53,908 123,315 1,883 Current tax assets 6,490 7,549 115
Derivative assets 5,077 3,075 47 Cash and cash equivalents 158,940
100,486 1,534
Total current assets 436,492 478,540 7,306
TOTAL ASSETS 600,033 654,022 9,985
EQUITY
Share capital 4,937 4,940 75 Share premium 14,031 14,335 219
Retained earnings 372,248 395,826 6,043 Share based payment reserve
1,312 1,776 27 Other components of equity 15,454 16,339 249 Equity
attributable to the equity holders of the Company 407,982 433,216
6,613 Non-controlling interest 1,646 1,936 30
Total equity
409,628 435,152 6,643
LIABILITIES
Long - term loans and borrowings 12,707 15,884 243 Deferred tax
liabilities 3,240 3,394 52 Derivative liabilities 71 71 1
Non-current tax liabilities 6,695 6,474 99 Other non-current
liabilities 3,658 6,838 104 Provisions 5 12 -
Total non-current
liabilities 26,376 32,673 499 Loans and borrowings and
bank overdrafts 66,206 83,427 1,274 Trade payables and accrued
expenses 58,745 61,515 940 Unearned revenues 16,549 17,040 260
Current tax liabilities 8,036 9,437 144 Derivative liabilities 753
1,124 17 Other current liabilities 12,223 12,451 190 Provisions
1,517 1,203 18
Total current liabilities 164,029 186,197
2,843
TOTAL LIABILITIES 190,405 218,870 3,342
TOTAL EQUITY AND LIABILITIES 600,033 654,022 9,985
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, 2014 2015 2015 2014 2015 2015
Convenience translation into
US dollar in millions (unaudited)- Refer
footnote 1 on Page 1
Convenience translation into
US dollar in millions (unaudited) - Refer
footnote 1 on Page 1
Gross revenues 116,838 125,135 1,910 228,196 247,511 3,779 Cost of
revenues (80,866) (85,824) (1,310) (155,807) (170,611) (2,605)
Gross profit 35,972 39,311 600
72,389 76,900 1,174 Selling and
marketing expenses (7,628) (8,708) (133) (15,185) (16,752) (256)
General and administrative expenses (6,605) (6,847) (105) (12,792)
(13,700) (209) Foreign exchange gains/(losses), net 1,323 533 8
2,421 1,863 28
Results from operating activities
23,062 24,289 370 46,833 48,311
737 Finance expenses (989) (1,589) (24) (1,877)
(2,875) (44) Finance and other income 5,109 6,194 95 9,348 11,436
175
Profit before tax 27,182 28,894 441
54,304 56,872 868 Income tax expense (6,199)
(6,486) (99) (12,141) (12,431) (190)
Profit for the period
20,983 22,408 342 42,163 44,441
678 Attributable to: Equity holders of the company
20,848 22,354 341 41,880 44,231 675 Non-controlling interest 135 54
1 283 210 3
Profit for the period 20,983 22,408 342 42,163
44,441 678
Earnings per equity share:
Attributable to equity share holders of the company Basic
8.49 9.10 0.14 17.05 18.01 0.27 Diluted 8.45 9.08 0.14 16.98 17.97
0.27 Weighted average number of equity shares used in
computing earnings per equity share Basic 2,455,543,231
2,456,285,585 2,456,285,585 2,455,543,231 2,456,223,408
2,456,223,408 Diluted 2,467,151,917 2,461,507,934 2,461,507,934
2,466,597,110 2,460,985,436 2,460,985,436
Additional
Information Segment Revenue IT Services Business
Units BFSI 28,411 32,253 492 56,476 63,273 966 HLS 12,176
13,746 210 23,466 26,734 408 RCTG 15,218 18,112 277 29,945 35,492
542 ENU 18,333 17,664 270 35,155 35,241 538 MFG 19,894 22,562 344
39,004 44,086 673 GMT 15,203 16,091 246 30,272 31,375 479
IT
SERVICES TOTAL 109,235 120,428 1,839 214,318 236,201 3,606 IT
PRODUCTS 9,152 5,442 83 16,812 13,616 208 RECONCILING ITEMS (226)
(202) (3) (513) (443) (7) TOTAL 118,161 125,668 1,920 230,617
249,374 3,807
Segment Result IT Services Business
Units BFSI 6,245 6,935 106 12,869 13,948 213 HLS 2,422 3,044 46
4,553 5,803 89 RCTG 3,205 3,262 50 6,393 6,402 98 ENU 5,000 3,497
53 9,553 7,309 112 MFG 4,034 4,801 73 8,402 9,128 139 GMT 3,496
3,137 48 7,258 5,835 89 OTHERS 608 - - 583 - - UNALLOCATED (987)
276 4 (1,611) 806 12
TOTAL IT SERVICES 24,023 24,952 381
48,000 49,231 752 IT PRODUCTS 62 (208) (3) 227 (69) (1) RECONCILING
ITEMS (1,023) (455) (7) (1,394) (851) (13) TOTAL 23,062 24,289 371
46,833 48,311 738 FINANCE EXPENSE (989) (1,589) (24) (1,877)
(2,875) (44) FINANCE AND OTHER INCOME 5,109 6,194 95 9,348 11,436
175 PROFIT BEFORE TAX 27,182 28,894 441 54,304 56,872 868 INCOME
TAX EXPENSE (6,199) (6,486) (99) (12,141) (12,431) (190)
PROFIT
FOR THE PERIOD 20,983 22,408 342
42,163
44,441 678 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 our customers organized by
industry verticals as follows: Banking, Financial Services and
Insurance (BFSI), Healthcare and Life Sciences (HLS), Retail,
Consumer, Transport and Government (RCTG), Energy, Natural
Resources and Utilities (ENU), Manufacturing (MFG), Global Media
and Telecom (GMT). Starting with quarter ended September 30, 2014,
it also includes Others which comprises dividend income and gains
or losses (net) relating to strategic investments, which are
presented within “Finance and other income” in the statement of
Income. Key service offering 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, 2015
Three Months ended September 30, 2015 IT Services Revenue as
per IFRS $ 1,831.9 IT Services Revenue as per IFRS $ 1,831.9 Effect
of Foreign currency exchange movement $ 18.2 Effect of Foreign
currency exchange movement $ 88.3 Non-GAAP Constant Currency IT
Services Revenue based on previous quarter exchange rates $ 1,850.1
Non-GAAP Constant Currency IT Services Revenue based on
previous year exchange rates $ 1,920.2
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,
2015, for cable transfers in Indian rupees, as certified by the
Federal Reserve Board of New York, which was US $1= Rs 65.50.
However, the realized exchange rate in our IT Services business
segment for the quarter ended September 30, 2015 was US$1= Rs
65.74
2. Refers to ‘Profit for the period attributable to equity
holders of the company’
3. Refers to Segment Results
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151021005881/en/
Wipro LimitedContact for Investor RelationsAravind
V SPhone: +91-80-4676 6186aravind.viswanathan@wipro.comorAbhishek
Kumar JainPhone: +1 978 826
4700abhishekkumar.jain@wipro.comorContact for Media &
PressVipin NairPhone: +91-80-4676-6154vipin.nair1@wipro.com
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