Gross Revenues grew 11% YoY
IT Services Segment Revenue in US Dollar
terms grew by 2.6% sequentially
Wipro Limited (NYSE:WIT) today announced financial
results under International Financial Reporting Standards (IFRS)
for its first quarter ended June 30, 2016.
Highlights of the Results for the
Quarter ended June 30, 2016:
- Gross Revenues were Rs. 136.0 billion
($2.0 billion1), an increase of 11% YoY.
- Net Income2 was Rs. 20.5 billion ($304
million1), a decrease of 6% YoY.
- IT Services Segment Revenue was
$1,930.8 million, a sequential increase of 2.6% and YoY increase of
7.6%
- Non-GAAP constant currency IT Services
Segment Revenue in dollar terms grew 2.0% sequentially and grew
9.5% YoY
- IT Services Segment Revenue in Rupee
terms was Rs. 131.1 billion ($1.9 billion1), an increase of 13%
YoY.
- IT Services Segment Profits3 was Rs.
23.3 billion ($345 million1), a decrease of 3% YoY.
- IT Services Margins4 was 17.8% for the
quarter, as compared to 19.7% for the quarter ended March 31,
2016.
Performance for the quarter ended June
30, 2016
Abidali Z. Neemuchwala, Chief Executive Officer and Member of
the Board, said, “We have delivered Revenues in line with our
guidance. Our early investments in areas such as our Digital
practice and cognitive intelligence, notably Wipro HOLMES is
positioning as the partner of choice for customers in the CHANGE
side of their business. We expect the trajectory of growth to build
gradually over the course of the year as we drive execution on our
strategic themes and make progress towards achieving a sustainable
growth trajectory.”
Jatin Dalal, Chief Financial Officer, said – “IT Services
margins reflect the investments in rewarding our employees as well
as the impact of consolidation of our acquisitions for the full
quarter. We continue to expand the reach of our automation programs
to harness efficiency gains.”
Outlook for the Quarter ending
September 30, 2016
We expect Revenues from our IT Services business to be in the
range of $1,931 million to $1,950 million*.
* Guidance is based on the following exchange rates: GBP/USD at
1.46, Euro/USD at 1.13, AUD/USD at 0.74, USD/INR at 67.12 and
USD/CAD at 1.29
IT Services
The IT Services segment had a headcount of 173,863 as of June
30, 2016.
Wipro continued its momentum in winning Large Deals globally as
described below:
A US-based Fortune 500 organization, specializing in food
processing solutions, has awarded an IT infrastructure
transformation and managed services contract to Wipro. The company
will set up an IT service desk, and enable data center
infrastructure consolidation, operations management, end user
services and enterprise security management as part of the project.
The engagement will enable the client to improve the agility of its
IT organisation and drive efficiencies by standardizing global
processes, improving asset utilization and accelerating innovation
in IT.
Wipro was awarded an IT infrastructure services deal by a
Europe-based global dairy co-operative. The project, which
leverages Wipro’s LiVE Workspace solution, will provide End User
Computing, Helpdesk and Security services for nearly 17,000 of the
company’s users in over 30 countries. Wipro will enable the
customer’s digital workspace journey, drive greater automation and
compliance, and enhance user experience by providing secure,
anywhere, anytime access to applications on devices of their
choice.
A top 5 Australian bank has awarded a four-year application
maintenance and support contract to Wipro. The company has been
working with the bank to modernize their core banking platform and
the new engagement will strengthen Wipro’s existing relationship
with the customer.
Wipro has won a multi-year BPaaS engagement with a leading
diversified financial services firm in the US for providing
end-to-end mortgage origination services including platform and
operations. The deal further strengthens Wipro’s leadership
position in mortgage platform, process, operations and Quality
Control solutions.
Wipro has won a multi-year engagement with a large US-based
pharmaceutical company to design and implement customized
end-to-end procure-to-pay services by reimagining their customers’
digital purchasing experience. Wipro will deploy Robotic Process
Automation to reduce manual intervention, enable BOT assisted
self-help functionalities for a superior user experience and
leverage Wipro Holmes Artificial Intelligence PlatformTM to improve
processes and facilitate rapid business-critical decision
making.
Digital highlights
Wipro has been chosen by a large media company to transform its
multi-channel experience. The program will improve the user
experience for the company’s customers across set top boxes, web
and mobile properties and enable new revenue opportunities for the
media company.
Wipro has won an engagement with a leading global payments
technology company to set-up an innovation lab which will develop
new product-service experiences in global payments. Wipro will
partner with the client’s innovation team to build a collaborative
and scalable model for the lab. Once ready, the lab will draw on
Wipro’s digital, design, data science and technology expertise.
A global pharmaceutical company has hired Wipro and Designit to
establish a Digital Innovation Lab. This lab will identify
opportunities in patient-centric digital health innovation and
support the development of new product-service experiences.
Designit has been selected by a leading German car manufacturer
to define their future retail concept. The project will focus on
implementation and re-designing the digital customer journey and
brand experience at select touch points.
We have had more than 10 cloud wins this quarter and a few of
the notable ones are as follows:
A leading Australian broadband provider has selected Wipro to
transform its customer service processes using a leading SaaS based
solution. The company is in the process of transforming its service
operations in line with its growth plans.
A North American commercial bank has selected Wipro to implement
its loan origination processes using a leading SaaS solution. The
solution will enable the bank to track a loan through its entire
life cycle while ensuring regulatory compliance, reducing risk,
increasing transparency and efficiency, and creating new revenue
opportunities.
As part of a large complex IT Transformation program for a
leading African Bank, Wipro has been chosen to deploy a cloud-based
Human Capital Management solution.
Wipro has been chosen by a global healthcare major to create a
single global Source-to-Pay platform to enable improved
collaboration with its supplier community and an enhanced user
experience. The solution is based on a SaaS based platform.
Wipro has been selected to develop a Collaborative Care platform
by a global pharma company to enable patient segmentation, higher
engagement & retention rates and optimize healthcare costs.
Delivery Excellence
Wipro has successfully completed a complex transformation
program involving the Utilities stack from a leading enterprise
software provider at NRGi Denmark. This helps NRGi realize its
vision to provide Digital Utility as a Service for superior
customer experience, readily deployable Customer Care and Billing
(CC&B) & Meter Data Management (MDM) platforms
implementation accelerators and digitization of customer
communications.
Wipro developed a “Common Imaging Framework” for Olympus to
optimize the time and effort spent on new product development
activities. This led to 15-20% cost savings depending on the
complexity of the new product and an overall reduction of 20% in
R&D expenses for the client.
Wipro helped a leading telecom services provider in Asia to
improve the performance of their Distribution Management System to
meet the surge in demand for recharge vouchers. This enabled the
client to increase revenue with reduced churn rate.
The transformation of POS systems across 1900 stores for a
leading US Oil and Lubes client has yielded higher instore customer
experience and potential revenue growth. Wipro has successfully
brought a 15% reduction in the run costs by transitioning the
ERP/POS system to cloud.
Awards and accolades
Wipro received the Citi Lean Partner award for 2015, in
recognition of its high levels of service and performance. The Lean
Partner Award recognizes a supplier that has supported Citi in the
execution of its re-engineering objectives and supported its effort
to drive client-centric process redesign throughout the company –
improving the way Citi operates. The award also recognizes the
supplier who has most embodied the spirit of Lean, a continuous
improvement program with tangible and measurable benefits as it
relates to purpose (rapid and consistent turnaround time for
services delivered), quality, efficiency, controls and overall
customer experience.
Wipro was recognized with the Best Global Healthcare and Life
Sciences IT Consultancy & Outsourcing Company Award 2016 at
Global Health and Pharma’s 2016 International Life Sciences Awards.
The company was also awarded the Product Innovation Award for the
Wipro 360 Digital Patient Centricity Suite.
Wipro is positioned as a “Leader” in Everest Group's 2016 PEAK
Matrix™ for Independent Testing Services for the second consecutive
year. Everest Group has lauded Wipro for its comprehensive
portfolio in Testing Services (consulting, applications and
infrastructure) across verticals, technologies and geographies and
called out proprietary solutions like Wipro Intelligent Quality
tools, Digital Assurance Platform, QA analytics and Managed QA
framework.
Wipro is positioned as a “Leader and Star Performer” in Everest
Group's 2016 PEAK Matrix™ for Workplace Services. Everest Group has
commended Wipro on key offerings and tools including Wipro Holmes
Artificial Intelligence PlatformTM, LiVE Workspace and Virtuadesk
and Wipro’s strong deal traction in Europe cutting across multiple
industries.
Wipro is recognized as a “Star Performer and Leader” in the
Everest Group Banking BPO PEAK Matrix. Everest Group says that
Wipro capitalizes on its wide bouquet of technology capabilities,
including its Wipro Holmes Artificial Intelligence PlatformTM to
deliver strong growth rate and remarkable market success.
Wipro featured in the “Winner’s Circle” by HfS Research in its
2016 Blueprint report on Telecom Operations As-a-Service. The
report acknowledges Wipro's progress towards As-a-Service with
design thinking, intelligent automation, data analytics and
collaborative pricing models.
Acquisitions
Previously, Wipro had announced, on December 23, 2015, the
signing of a definitive agreement to acquire Viteos Group. However,
due to inordinate delays in completion of closing conditions that
exceeded the target closing date and expiration date under the
terms of the agreement, both parties have decided not to proceed
ahead with the acquisition.
Changes to the Board of
Directors
Dr. Jagdish N. Sheth retires from the Board with effect from
July 18, 2016 on completion of his term. The Board places on record
its sincere appreciation for the valuable contributions made by Dr.
Jagdish N. Sheth as Board member and as a member of the Strategy
Committee.
Mr. Vyomesh Joshi, Director resigns from the Board with effect
from close of business hours of July 19, 2016, due to his other
commitments. The Board places on record its sincere appreciation
for the valuable contributions made by Mr. Vyomesh Joshi as Board
member and as a member of the Strategy Committee.
Auditor Announcement
As per the provisions of Section 139 of the Companies Act, 2013
and the Rules thereunder, Audit Committee has proposed and the
Board of Directors of the Company have recommended the appointment
of Deloitte Haskins & Sells LLP as statutory auditors of the
Company for a term of five years, subject to the approval of
shareholders of the Company, for the audit of financial statements,
with effect from the Financial Year 2017-18.
About Deloitte Haskins & Sells LLP : Deloitte Haskins
& Sells was constituted on October 11, 1997. On November 20,
2013, Deloitte Haskins & Sells was converted to Deloitte
Haskins & Sells LLP (the “Firm”) which is incorporated under
the Limited Liability Partnership Act 2008. The Firm is registered
with the Institute of Chartered Accountants of India (Registration
No. 117366W/W-100018). The Firm has 136 Partners as on April 1,
2016.
IT Products
- Revenue for the quarter ended June 30,
2016 was Rs. 5.9 billion ($88 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.
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, 2016, 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. The audio from the conference call
will be available online through a web-cast and can be accessed at
this link- http://services.choruscall.eu/links/wipro160719.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 (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.” By combining
digital strategy, customer centric design, advanced analytics and
product engineering approach, Wipro helps its clients create
successful and adaptive businesses. A company recognized globally
for its comprehensive portfolio of services, strong commitment to
sustainability and good corporate citizenship, Wipro has a
dedicated workforce of over 170,000, serving clients 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
June 30, 2016 2016 2016
Convenience translation into
US dollar in millions (unaudited) - Refer
footnote 1
ASSETS
Goodwill 101,991 103,491 1,533 Intangible assets 15,841 15,354 227
Property, plant and equipment 64,952 66,110 979 Derivative assets
260 212 3 Investments 4,907 4,985 74 Non-current tax assets 11,751
11,938 177 Deferred tax assets 4,286 4,125 61 Other non-current
assets 15,828 16,166 239
Total non-current assets 219,816
222,381 3,293 Inventories 5,390 6,454 96 Trade receivables
100,976 102,072 1,512 Other current assets 32,894 34,607 513
Unbilled revenues 48,273 52,251 774 Investments 204,244 197,671
2,928 Current tax assets 7,812 8,292 123 Derivative assets 5,549
4,947 73 Cash and cash equivalents 99,049 124,435 1,843
Total
current assets 504,187 530,729 7,862
TOTAL ASSETS
724,003 753,110 11,155
EQUITY
Share capital 4,941 4,941 73 Share premium 14,642 14,642 217
Retained earnings 425,106 445,732 6,601 Share based payment reserve
2,229 2,557 38 Other components of equity 18,242 21,436 318 Equity
attributable to the equity holders of the Company 465,160 489,308
7,247 Non-controlling interest 2,224 2,318 34
Total equity
467,384 491,626 7,281
LIABILITIES
Long - term loans and borrowings 17,361 17,225 255 Deferred tax
liabilities 5,108 4,869 72 Derivative liabilities 119 123 2
Non-current tax liabilities 8,231 7,842 116 Other non-current
liabilities 7,225 7,032 104 Provisions 14 18 -
Total non-current
liabilities 38,058 37,109 549 Loans, borrowings and bank
overdrafts 107,860 111,441 1,651 Trade payables and accrued
expenses 68,187 70,997 1,052 Unearned revenues 18,076 15,436 229
Current tax liabilities 7,015 9,932 147 Derivative liabilities
2,340 1,331 20 Other current liabilities 13,821 14,056 208
Provisions 1,262 1,182 18
Total current liabilities 218,561
224,375 3,325
TOTAL LIABILITIES 256,619 261,484 3,874
TOTAL EQUITY AND LIABILITIES 724,003 753,110
11,155
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 June 30, 2015
2016 2016
Convenience translation into
US dollar in millions (unaudited) Refer
footnote 1
Gross revenues 122,376 135,992 2,014 Cost of revenues (84,787)
(96,389) (1,428)
Gross profit 37,589 39,603
586 Selling and marketing expenses (8,044) (10,141)
(150) General and administrative expenses (6,893) (7,599) (113)
Foreign exchange gains/(losses), net 1,330 984 15
Results
from operating activities 23,982 22,847
338 Finance expenses (1,286) (1,336) (20) Finance and
other income 5,335 5,200 77
Profit before tax 28,031
26,711 395 Income tax expense (5,958) (6,122) (91)
Profit for the period 22,073 20,589 304
Attributable to: Equity holders of the company 21,917 20,518
303 Non-controlling interest 156 71 1
Profit for the period
22,073 20,589 304
Earnings per equity share:
Attributable to equity share holders of the company Basic
8.92 8.35 0.12 Diluted 8.91 8.33 0.12 Weighted average
number of equity shares used in computing earnings per equity share
Basic 2,455,804,709 2,457,363,886 2,457,363,886 Diluted
2,460,584,039 2,463,397,368 2,463,397,368
Additional
Information Segment Revenue IT Services Business
Units BFSI 31,020 33,630 498 HLS 12,988 19,931 295 CBU 18,700
20,725 307 ENU 17,577 17,356 257 MNT 26,963 29,538 438 COMM 8,525
9,912 147
IT SERVICES TOTAL 115,773 131,092 1,942 IT
PRODUCTS 8,174 5,930 88 RECONCILING ITEMS (241) (46) (1) TOTAL
123,706 136,976 2,029
Segment Result IT Services
Business Units BFSI 6,947 6,994 103 HLS 2,754 2,856 42 RCTG
3,082 3,775 56 ENU 3,587 3,025 45 MFG 5,833 5,954 88 GMT 1,248
1,502 22 OTHERS - - UNALLOCATED 530 (837) (12)
TOTAL IT
SERVICES 23,981 23,269 344 IT PRODUCTS 103 (368) (5)
RECONCILING ITEMS (102) (54) (1) TOTAL 23,982 22,847 338 FINANCE
EXPENSE (1,286) (1,336) (20) FINANCE AND OTHER INCOME 5,335 5,200
77 PROFIT BEFORE TAX 28,031 26,711 395 INCOME TAX EXPENSE (5,958)
(6,122) (91)
PROFIT FOR THE PERIOD 22,073
20,589 304
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. Effective
April 1, 2016, we realigned our industry verticals. The
Communication Service Provider business unit was regrouped from the
former GMT industry vertical into a new industry vertical named
“Communications”. The Media business unit from the former GMT
industry vertical has been realigned with the former RCTG industry
vertical which has been renamed as “Consumer Business Unit”
industry vertical. Further, the Network Equipment Provider business
unit of the former GMT industry vertical has been realigned with
the Manufacturing industry vertical to form the “Manufacturing and
Technology” industry vertical. The revised industry verticals are
as follows: Finance Solutions (BFSI), Healthcare, Lifesciences
& Services (HLS), Consumer (CBU), Energy, Natural Resources
& Utilities (ENU), Manufacturing & Technology (MNT),
Communications (COMM). IT Services segment 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 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 June 30,2016
IT Services Revenue as per IFRS $ 1,930.8 IT
Services Revenue as per IFRS $ 1,930.8 Effect of Foreign currency
exchange movement $ (10.9 ) Effect of Foreign currency exchange
movement $ 34.2 Non-GAAP Constant Currency IT Services Revenue
based on previous quarter exchange rates $ 1,919.9 Non-GAAP
Constant Currency IT Services Revenue based on previous year
exchange rates $ 1,965 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 June 30, 2016, for cable transfers in Indian
rupees, as certified by the Federal Reserve Board of New York,
which was US $1= Rs. 67.51. However, the realized exchange rate in
our IT Services business segment for the quarter ended June 30,
2016 was US$1= Rs. 67.89 2. Net Income refers to ‘Profit for the
period attributable to equity holders of the Company’ 3. Segment
Profit refers to segment results. Effective April 1, 2016, the
segment results is measured after including the amortization charge
for acquired intangibles to the respective segments. Such costs
were classified under reconciling items till the year ended March
31, 2016. Comparative information has been restated to give effect
to the same. 4. Margins have been computed based on the change as
listed in 3. above
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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- 4672
6450vipin.nair1@wipro.com
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