Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for its quarter ended December 31, 2017.
 
Highlights of the Results

• Gross Revenue of Wipro Limited was Rs 136.7 billion ($2.1 billion¹).

• IT Services Segment Revenue in Non-GAAP constant currency increased by 0.9% sequentially, in line with our Guidance.

• IT Services Segment Revenue in dollar terms was $2,013.0 million, remaining flat sequentially and increasing by 5.8% YoY.

• IT Services Margin for the quarter was 14.8%, impacted by a provision of Rs 3,175 million ($49.7 million¹) made with respect to insolvency of a customer post the balance sheet date. Adjusted for this event, IT Services Margin for the quarter was 17.2%.

• Net Income³ for the quarter was Rs19.4 billion ($303 million¹), a decrease of 8.2% YoY. Adjusted for the customer insolvency event, Net Income³ for the quarter increased by 4.0% YoY.

• Wipro declared an interim dividend of Rs1 ($0.02¹) per share/ADS.

Performance for the quarter ended December 31, 2017

Abidali Z. Neemuchwala, CEO and Member of the Board said – “We continued to improve our growth trajectory driven by strong momentum in BFSI and uptick in Healthcare. This is also reflected in our outlook for the next quarter.  Our leadership in Digital continues to strengthen with over 25% of our revenues now coming from Digital.”
 
Jatin Dalal, Chief Financial Officer said – “We have made strong progress in our client mining with number of clients contributing revenues over $50 million increasing from 33 to 41 in the last 1 year. In the first 9 months of the current fiscal year, we generated robust Operating Cash Flows of Rs 77 billion, 14.2% more than the same period last year. We also completed the Share Buyback in December and saw strong participation from our investors.”
 
Outlook for the Quarter ending March 31, 2018

We expect Revenues from our IT Services business to be in the range of $2,033 million to $2,073 million*.
 
Share Buyback Update

In the quarter ended December 31, 2017, the Company has concluded the buyback of 343.75 million equity shares as approved by the Board of Directors on July 20, 2017. This has resulted in a total cash outflow of Rs 110,000 million.
 
IT Services
Wipro continued its momentum in winning large deals globally as described below:
 
A leading global financial services company has chosen Wipro as a strategic partner to support its compliance and operational risk applications. The engagement will help the client achieve increased productivity and enhanced end-customer engagement.
 
A leading North American specialty retailer has expanded a business process services contract with Wipro. As part of the engagement, Wipro will help the retailer improve its Net Promoter Score (NPS) by driving a superior customer care experience for its end-customers.
 
A leading global manufacturer of cleaning and hygiene products has awarded an end-to-end IT infrastructure contract to Wipro. The intelligent analytics capabilities of Wipro HOLMES^TM will be used to improve the operational efficiency and end user experience.
 
A North American telecom major has awarded a quality assurance contract to Wipro, wherein Wipro will manage the testing of Business Support Systems applications for the client.
 
Wipro has also won a multi-year engagement with a leading airport in North America for developing a resilient, agile and scalable IT system. This program will enhance core business-critical airport systems such as passenger processing, baggage processing and the Airport Operational Database (AODB) and will lay the foundation for next-gen digital transformation initiatives.
 
Oriental Bank of Commerce, a leading public-sector bank in India has awarded Wipro a contract to implement an Enterprise-wide Data Warehousing (EDW) solution. The deployment will help the bank respond nimbly to regulatory reporting requirements. It will also enable the bank to develop a single view of its customer base and enhance its focus on customer centricity.
 
Wipro will enable analytics, digital and Smart Campus initiatives for a leading university in the APAC region.
 
Digital highlights

We saw increasing traction in digital oriented deals as illustrated below:
 
A global automotive company has selected Wipro to redesign its retail strategy, ranging from physical spaces to digital experiences.
 
A major international payments provider has awarded Wipro Digital a pilot project focused on payments and wearables. The project will leverage Designit’s expertise in technology, product and service design.
 
Wipro has won a workspace services deal encompassing service desk operations and end-user services with a leading Brazilian retail chain. The engagement will leverage the Wipro HOLMES^TM chatbot to enhance the end-user experience at the retail chain’s stores.
 
A public transport authority in the Middle East has awarded a project to Wipro to design and develop a big data information platform. Wipro will develop a state-of-the-art data lake to process and analyze data across the customer’s landscape to help them derive actionable insights.
 
Wipro also won a number of deals in the Cloud applications space leveraging Appirio Cloud Services:

• A Fortune 500 medical devices organization has selected Wipro for a multi-year global front-office transformation project.

• A global provider of banking and financial services has awarded Wipro a contract to upgrade its user experience and simplify their sales and service process.

• An American chain of luxury departmental stores has selected Wipro to reimagine its employee experience and modernize their HR processes.

• Wipro has won a customer experience transformation contract from an international charitable organization.

Delivery Excellence

Magne Solberg, CIO, Co-op said – “We selected Wipro as a strategic partner because of their retail domain expertise, investment in digital technologies, and strong SAP and infrastructure capabilities. We are planning to leverage Wipro’s expertise in our own digital journey. We have experienced Wipro’s investment in Artificial Intelligence, cognitive and digital solutions such as on-shelf availability, AR promotions and VR home shopper. This engagement has benefited our supply chain, and logistics operations, back office and in-store availability with increased efficiency, reach and availability. Wipro also helped us in successfully integrating one of our recent acquisitions ICA by migrating ICA’s SAP platform to Azure cloud. We strongly recommend Wipro as we strengthen our position in the Norwegian retail market. I think Wipro’s new branding and logo are signs that Wipro is truly looking to transform the way they reset the future digital journeys for their customers.”
 
Analyst Accolades and Awards

Wipro was positioned as a Leader in Everest Group FAO PEAK Matrix™ 2017
 
Wipro was positioned as a Leader in Everest Group PEAK – Service Provider Landscape with PEAK Matrix™ Assessment for 2017 for Risk & Regulatory Compliance Application Services in BFS
 
Wipro was positioned as a Leader in Everest Group Healthcare Payer BPO PEAK Matrix™ 2017
 
Wipro has been recognized as a market leader in Digital Workplace Services by Information Services Group (ISG), a leading global technology research and advisory firm
 
Wipro positioned as a Leader by Everest Group in Cloud Enablement Services – Market Trends and Services PEAK Matrix™ 2017
 
Wipro was positioned as a Leader by ISG in Provider Lens™ Public Cloud Infrastructure Consulting & Implementation Services, 2017
 
Wipro was recognized as a Leader by The Forrester in Wave™ – Next-Generation Infrastructure Outsourcing, Q4 2017
 
Wipro has been recognized as Platform Partner of the Year 2017 by BMC Software and won the highest number of accreditations for Security Operations at the BMC Outsourcers Tech Summit (BOTS)
 
Wipro was ranked #2 in the list of ‘Top 20 Service Outsourcing MNCs in China 2017’ in a study by Devott, a leader in research and advisory of China's outsourcing and technology markets
 
Wipro was recognized as one of India’s most innovative companies by Confederation of Indian Industry (CII) at the Industrial Innovation Awards 2017, for the value addition that Wipro brings to its clients and the ecosystem through its Data Discovery Platform, Smart i-Connect Platform and Open Innovation process
 
IT Products

• Revenue for the quarter ended December 31, 2017 was Rs 4.5 billion ($70 million¹).

• IT Products Margin for the quarter was 4.3%, as compared to 2.9% for the quarter ended September 30, 2017.

Please refer the table at the end of the release 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 December 31, 2017, prepared under IFRS, along with individual business segment reports, are available in the Investors section of our website www.wipro.com

Quarterly Conference Call

We will hold an earnings conference call today at 07:15 p.m. Indian Standard Time (09:45 a.m. U.S. Eastern Time) to discuss our performance for the quarter. The audio from the conference call will be available online through a web-cast and can be accessed at the following link- http://services.choruscall.eu/links/wipro180119.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
 
All product names, logos, and brands are property of their respective owners.

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 160,000 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.
 

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. The industry verticals are as follows: Banking,Financial Services and Insurance (BFSI), Healthcare and Lifesciences (HLS), Consumer Business Unit (CBU), Energy, Natural Resources and Utilities (ENU), Manufacturing & Technology (MNT), Communications (COMM). IT Services segment also includes Others which comprises dividend income 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, software products and other related deliverables.
 

* Outlook is based on the following exchange rates: GBP/USD at 1.33, Euro/USD at 1.18, AUD/USD at 0.76, USD/INR at 64.49 and USD/CAD at 1.28.

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 December 31, 2017, for cable transfers in Indian Rupees, as certified by the Federal Reserve Board of New York, which was US $1= Rs 63.83. However, the realized exchange rate in our IT Services business segment for the quarter ended December 31, 2017 was US$1= Rs 65.74

2. Segment Profit refers to Segment Results Total.

3. Net Income refers to ‘Profit for the period attributable to equity holders of the Company’