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

IT Services delivers strong revenue growth for the quarter at 8.1% QoQ and 28.8% YoY

Net Income & EPS showed a robust increase of 18.9% YoY and 23.8% YoY respectively

Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for the Quarter ended September 30, 2021.

Highlights of the Results

Results for the Quarter ended September 30, 2021:

  • Gross Revenue was Rs 196.7 billion ($2.7 billion1), an increase of 7.8% QoQ and 30.1% YoY
  • IT Services Segment Revenue was at $2,580.0 million, an increase of 6.9% QoQ and 29.5% YoY
  • Non-GAAP2 constant currency IT Services Segment Revenue increased by 8.1% QoQ and 28.8% YoY
  • IT Services Operating Margin3 for the quarter was at 17.8%, flat on adjusted4 basis QoQ and reported decrease of 104 bps QoQ
  • Net Income for the quarter was Rs 29.3 billion ($395.2 million1), an increase of 18.9% YoY
  • Earnings Per Share for the quarter was at Rs 5.36 ($0.071), an increase of 23.8% YoY

Performance for the quarter ended September 30, 2021

Thierry Delaporte, CEO and Managing Director said, “The Q2 results demonstrate that our business strategy is working well. We grew at over 4.5% organic sequential growth for a second quarter in a row, resulting in a 28% YoY growth in the first half of this financial year. I thank our customers, partners, and colleagues as we surpassed the $10Bn milestone of annualized revenue run rate.”

Jatin Dalal, Chief Financial Officer said, “We sustained our operating margins in Q2 in a narrow band even after absorbing the full impact of our recent acquisitions and investing significantly in our business across sales, capabilities and talent. We completed a salary increase covering 80% of our colleagues, making it the second hike in this calendar year. We delivered a robust growth in EPS of 23.8% YoY.”

Outlook for the quarter ending December 31, 2021

We expect Revenue from our IT Services business to be in the range of $2,631 million to $2,683 million*. This translates to a sequential growth of 2.0% to 4.0%.

*Outlook is based on the following exchange rates: GBP/USD at 1.36, Euro/USD at 1.17, AUD/USD at 0.72, USD/INR at 74.13 and CAD/USD at 0.78

  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 74.16, as published by the Federal Reserve Board of Governors on September 30, 2021. However, the realized exchange rate in our IT Services business segment for the quarter ended September 30, 2021 was US$1= Rs 75.11
  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
  4. IT Services Operating Margin change has been adjusted for one time gains in ‘other operating income’ in Q1’22 for Rs 2,150 million

IT Services

Wipro continued its momentum in winning large deals with our customers as described below:

  • Wipro has won a strategic, multi-year cloud migration and application modernization engagement with a leading North American financial institution to transform and migrate its enterprise applications across all lines of business. The engagement will lower total cost of ownership (TCO) and provide the bank with significant tools and intellectual property to modernize its processes and become more nimble.
  • Wipro has won a multi-year engagement with ABB Information Systems to provide digital workplace services for their 100,000+ employees spread over 100+ countries. Wipro will support and contribute to the transformation of ABB’s end-user infrastructure to enhance the consumer experience, leveraging industry-leading practices.
  • Wipro has won an engagement with a global healthcare company to consolidate and deliver member engagement services for various public assistance programs. The scope includes outreach, advocacy, retention services, as well as procuring and revival of patient’s health care records securely. Additionally, Wipro will guide dual eligible members on benefits and beneficiary protections.
  • Wipro has won a strategic, multi-year engagement with a leading North American financial institution to modernize and transform the Quality Engineering and Testing portfolio within their Retail and Commercial Banking segment to the new ways of working. The engagement will focus on Digital Transformation for enhanced customer experience and cost optimization.
  • Wipro has won an engagement with a US-based financial services organization to extend its capabilities into Infrastructure Operations and Engineering. The multi-year deal expands the partnership while driving greater productivity, increased delivery speed, and higher business value, ensuring a stable and modern IT Infrastructure.

Digital Services Highlights

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

  • Wipro has won an engagement with a multinational electrical engineering and software company to transform their sales and marketing services across subsidiaries and affiliated companies spread over 55 countries. Wipro FullStride Cloud Services will develop and implement a cloud platform to empower the client with a single global view of their customer database.
  • Wipro has won a strategic engagement with a leading multinational financial services company in LATAM to accelerate their digital transformation journey. Wipro will deliver API and micro services based on Banking Industry Architecture Network model and modernize the bank’s direct and assisted customer channels.
  • A US-based software solutions company has selected Wipro to transfer their on-premise platforms to a SaaS-based business model. Wipro FullStride Cloud Services will modernize the client’s offerings using cloud native capabilities.
  • A global technology company has hired Designit to support the operation and management of 100+ social and blog channels as part of their B2B marketing program.

Analyst Recognition

  • Wipro was recognized as a Leader in Everest Group’s Application and Digital Services in Banking PEAK Matrix® Assessment 2021: Global Focus
  • Wipro was recognized as a Leader in Everest Group’s Network Transformation and Managed Services PEAK Matrix® Assessment 2021
  • Wipro was recognized as a Leader in Everest Group’s Data and Analytics (D&A) Services PEAK Matrix® Assessment 2021
  • Wipro was recognized as a Leader in Everest Group’s Capital Markets Operations – Services PEAK Matrix® Assessment 2021
  • Wipro was recognized as a Leader and Star Performer in Everest Group’s Finance and Accounting Outsourcing (FAO) – Service Provider Landscape with PEAK Matrix® Assessment 2021
  • Wipro was positioned as a Leader in IDC MarketScape: Worldwide Network Consulting Services 2021 Vendor Assessment (Doc #US48076121, Aug 2021)
  • Wipro was positioned as a Leader in IDC MarketScape: Asia/Pacific (Excluding Japan) Managed Cloud Services 2021 Vendor Assessment (Doc #AP47014921, Aug 2021)
  • Wipro was positioned as a Leader in IDC MarketScape: Worldwide Life Science R&D ITO Services 2021 Vendor Assessment (Doc #US47455021, Aug 2021)
  • Wipro was positioned as a Leader in IDC MarketScape: Worldwide Life Science R&D BPO Services 2021 Vendor Assessment (Doc #US48076121, Aug 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 2021 ISG Provider Lens™ – SAP HANA Ecosystem Services 2021 – UK, US
  • Wipro was positioned as a Leader in 2021 ISG Provider Lens™ – Utilities Industry - Services and Solutions 2021 - North America
  • Wipro was featured in the Top Players in HFS Top 10: Banking and Financial Services 2021
  • Wipro was recognized as a Gartner Peer Insights Customers’ Choice for Data and Analytics Service Providers

Disclaimer: Gartner Peer Insights ‘Voice of the Customer’: Data and Analytics Service Providers, Peer Contributors, 19 August 2021. Gartner Peer Insights Customers’ Choice constitute the subjective opinions of individual end-user reviews, ratings, and data applied against a documented methodology; they neither represent the views of, nor constitute an endorsement by, Gartner or its affiliates.

IT Products

  • IT Products Segment Revenue for the quarter was Rs 1.9 billion ($25.5 million1)
  • IT Products Segment Results for the quarter was a profit of Rs 0.1 billion ($1.3 million1)

India business from State Run Enterprises (ISRE)

  • India SRE Segment Revenue for the quarter was Rs 1.9 billion ($25.2 million1)
  • India SRE Segment Results for the quarter was a profit of Rs 0.4 billion ($5.3 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 September 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=WIP20211013

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 220,000 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.

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 September 30, 2021

Convenience translation into US

dollar in millions

Refer footnote 1

ASSETS

Goodwill

139,127

228,763

3,085

Intangible assets

13,085

42,808

577

Property, plant and equipment

85,192

88,813

1,198

Right-of-Use assets

16,420

18,305

247

Financial assets

Derivative assets

16

28

^

Investments

10,576

13,208

178

Trade receivables

4,358

4,378

59

Other financial assets

6,088

8,057

109

Investments accounted for using the equity method

1,464

698

9

Deferred tax assets

1,664

2,576

35

Non-current tax assets

14,323

10,740

145

Other non-current assets

15,935

11,668

157

Total non-current assets

308,248

430,042

5,799

Inventories

1,064

778

10

Financial assets

Derivative assets

4,064

4,308

58

Investments

175,707

175,223

2,363

Cash and cash equivalents

169,793

142,026

1,915

Trade receivables

94,298

108,507

1,463

Unbilled receivables

27,124

38,375

517

Other financial assets

7,245

10,495

142

Contract assets

16,507

20,467

276

Current tax assets

2,461

4,717

64

Other current assets

24,923

27,199

367

Total current assets

523,186

532,095

7,175

 

TOTAL ASSETS

831,434

962,137

12,974

 

EQUITY

Share capital

10,958

10,962

148

Share premium

714

1,164

16

Retained earnings

466,692

526,654

7,102

Share-based payment reserve

3,071

3,807

51

SEZ Re-investment reserve

41,154

43,237

583

Other components of equity

30,506

35,840

483

Equity attributable to the equity holders of the Company

553,095

621,664

8,383

Non-controlling interests

1,498

1,088

15

TOTAL EQUITY

554,593

622,752

8,398

 

LIABILITIES

Financial liabilities

Loans and borrowings

7,458

55,319

746

Lease liabilities

13,513

15,283

206

Other financial liabilities

2,291

2,326

31

Deferred tax liabilities

4,633

14,902

201

Non-current tax liabilities

11,069

11,415

154

Other non-current liabilities

7,835

8,871

120

Provisions

2

1

^

Total non-current liabilities

46,801

108,117

1,458

Financial liabilities

Loans, borrowings and bank overdrafts

75,874

58,910

794

Derivative liabilities

1,070

432

6

Trade payables and accrued expenses

78,870

90,782

1,225

Lease liabilities

7,669

8,697

117

Other financial liabilities

1,470

4,106

55

Contract liabilities

22,535

21,577

291

Current tax liabilities

17,324

19,385

261

Other current liabilities

24,552

26,512

357

Provisions

676

867

12

Total current liabilities

230,040

231,268

3,118

TOTAL LIABILITIES

276,841

339,385

4,576

 

TOTAL EQUITY AND LIABILITIES

831,434

962,137

12,974

^ 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 September 30,

Six months ended September 30,

2020

2021

2021

2020

2021

2021

Convenience

translation into

US dollar in

millions

Refer footnote 1

Convenience

translation into

US dollar in

millions

Refer footnote 1

Revenues

151,145

 

196,674

 

2,652

 

300,276

 

379,198

 

5,113

 

Cost of revenues

(105,387

)

(137,562

)

(1,855

)

(209,087

)

(265,129

)

(3,575

)

Gross profit

45,758

 

59,112

 

797

 

91,189

 

114,069

 

1,538

 

 

Selling and marketing expenses

(9,606

)

(13,852

)

(188

)

(19,395

)

(26,869

)

(362

)

General and administrative expenses

(8,177

)

(11,288

)

(152

)

(18,183

)

(21,818

)

(294

)

Foreign exchange gains/(losses), net

338

 

933

 

13

 

1,543

 

2,093

 

28

 

Other operating income/(loss), net

(178

)

15

 

^

 

(81

)

2,165

 

29

 

Results from operating activities

28,135

 

34,920

 

470

 

55,073

 

69,640

 

939

 

 

Finance expenses

(1,267

)

(1,459

)

(20

)

(2,566

)

(2,205

)

(30

)

Finance and other income

5,209

 

4,114

 

55

 

10,490

 

8,733

 

118

 

Share of net profit/ (loss) of associates accounted for using the equity method

(6

)

(10

)

^

 

25

 

(3

)

^

 

Profit before tax

32,071

 

37,565

 

505

 

63,022

 

76,165

 

1,027

 

Income tax expense

(7,228

)

(8,259

)

(111

)

(14,066

)

(14,484

)

(195

)

Profit for the period

24,843

 

29,306

 

394

 

48,956

 

61,681

 

832

 

 

Profit attributable to:

Equity holders of the Company

24,656

 

29,307

 

394

 

48,558

 

61,628

 

831

 

Non-controlling interests

187

 

(1

)

^

 

398

 

53

 

1

 

Profit for the period

24,843

 

29,306

 

394

 

48,956

 

61,681

 

832

 

 

Earnings per equity share:

Attributable to equity holders of the Company

Basic

4.33

 

5.36

 

0.07

 

8.53

 

11.28

 

0.15

 

Diluted

4.32

 

5.35

 

0.07

 

8.51

 

11.25

 

0.15

 

 

Weighted average number of equity shares

used in computing earnings per equity share

Basic

5,694,035,551

 

5,464,831,135

 

5,464,831,135

 

5,693,689,502

 

5,464,021,919

 

5,464,021,919

 

Diluted

5,706,874,339

 

5,480,490,360

 

5,480,490,360

 

5,705,850,555

 

5,478,297,758

 

5,478,297,758

 

^ Value is less than 1

 

Additional Information:

Particulars

Three months ended

Six months ended

Year ended

September

30, 2021

June

30, 2021

September

30, 2020

September

30, 2021

September

30, 2020

March

31, 2021

Audited

Audited

Audited

Audited

Audited

Audited

Revenue

IT Services

Americas 1

53,205

 

49,683

 

43,954

 

102,888

 

86,566

 

178,091

 

Americas 2

59,260

 

55,105

 

44,450

 

114,365

 

88,644

 

179,821

 

Europe

58,619

 

54,461

 

38,510

 

113,080

 

77,454

 

165,441

 

APMEA

22,715

 

21,232

 

20,762

 

43,947

 

40,920

 

82,462

 

Total of IT Services

193,799

 

180,481

 

147,676

 

374,280

 

293,584

 

605,815

 

IT Products

1,894

 

1,311

 

1,699

 

3,205

 

4,005

 

7,685

 

ISRE

1,867

 

1,937

 

2,111

 

3,804

 

4,222

 

8,912

 

Reconciling Items

47

 

(45

)

(3

)

2

 

8

 

13

 

Total Revenue

197,607

 

183,684

 

151,483

 

381,291

 

301,819

 

622,425

 

 

Other operating income/(loss), net

IT Services

15

 

2,150

 

(178

)

2,165

 

(81

)

(81

)

Total Other operating income/(loss), net

15

 

2,150

 

(178

)

2,165

 

(81

)

(81

)

 

Segment Result

IT Services

Americas 1

10,521

 

9,379

 

8,598

 

19,900

 

15,102

 

33,040

 

Americas 2

11,819

 

11,350

 

10,477

 

23,169

 

20,899

 

41,589

 

Europe

9,186

 

8,325

 

6,139

 

17,511

 

13,686

 

31,673

 

APMEA

3,028

 

3,066

 

3,078

 

6,094

 

5,624

 

11,476

 

Unallocated

(156

)

56

 

203

 

(100

)

951

 

5,153

 

Other operating income/(loss), net

15

 

2,150

 

(178

)

2,165

 

(81

)

(81

)

Total of IT Services

34,413

 

34,326

 

28,317

 

68,739

 

56,181

 

122,850

 

IT Products

94

 

(53

)

(301

)

41

 

(178

)

45

 

ISRE

393

 

475

 

109

 

868

 

3

 

1,061

 

Reconciling Items

20

 

(28

)

10

 

(8

)

(933

)

(903

)

Total

34,920

 

34,720

 

28,135

 

69,640

 

55,073

 

123,053

 

Finance expenses

(1,459

)

(746

)

(1,267

)

(2,205

)

(2,566

)

(5,088

)

Finance and Other Income

4,114

 

4,619

 

5,209

 

8,733

 

10,490

 

20,912

 

Share of net profit/ (loss) of associates accounted for using the equity method

(10

)

7

 

(6

)

(3

)

25

 

130

 

Profit before tax

37,565

 

38,600

 

32,071

 

76,165

 

63,022

 

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 September 30, 2021

IT Services Revenue as per IFRS

$

2,580.0

 

Effect of Foreign currency exchange movement

$

31.0

 

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

$

2,611.0

 

 

 

Three Months ended September 30, 2021

IT Services Revenue as per IFRS

$

2,580.0

 

Effect of Foreign currency exchange movement

$

(13.6

)

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

$

2,566.4

 

 

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