Wipro Limited Announces Results for the Quarter ended June 30, 2018 under IFRS | Digital Conqueror

Wipro Limited Announces Results for the Quarter ended June 30, 2018 under IFRS

Business Wire IndiaWipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for its quarter ended June 30, 2018.
Highlights of the Results
Results for the Quarter ended June 30, 2018:

  • Gross Revenue was Rs 139.8 billion ($2.0 billion1), up 1.5% sequentially and 2.6% YoY.
  • IT Services Segment Revenue at Rs 137.0 billion ($2.0 billion1), up 2.2% sequentially and 5.2% YoY.
  • IT Services Segment Revenue in dollar terms at $2,026.5 million, down 1.7% sequentially, up 2.8% YoY.
  • Non-GAAP constant currency IT Services Segment Revenue up 0.1% sequentially and 2.4% YoY.
  • IT Services Margin2 for the quarter at 17.2%. This includes a gain of Rs 2,529 million ($36.9 million1) from the sale of our hosted data center business in the quarter ended June 30, 2018.
  • EPS for the quarter at Rs 4.71 ($0.071) per share, an increase of 9.9% YoY.

Performance for the Quarter ended June 30, 2018
Abidali Z. Neemuchwala, CEO and Member of the Board said – “We have seen pickup in spending in the developed markets, particularly in North America and BFSI. Our investments in Digital continue to help us build differentiation in key industry segments, which is resulting in a consistent improvement in our client metrics. We have had a good quarter of order bookings and I am confident we are moving in the right direction.”
Jatin Dalal, Chief Financial Officer said -“We successfully concluded the sale of our hosted data center business in the quarter. We continue to improve our operating metrics and generated strong operating cash flows at 136% of our Net Income during the quarter.
Outlook for the Quarter ending September 30, 2018
We expect Revenue from our IT Services business to be in the range of $2,009 million to $2,049 million*. This translates to a sequential growth of 0.3% to 2.3%, excluding the impact of the divestment of our hosted data center services business which concluded in the quarter ended June 30, 2018.
* Outlook is based on the following exchange rates: GBP/USD at 1.34, Euro/USD at 1.18, AUD/USD at 0.75, USD/INR at 68.50 and USD/CAD at 1.29.
IT Services
Wipro continued its momentum in winning large deals globally as described below:
Wipro has won an applications cloud migration contract from a European investment bank for their repository of applications.
A major US airline has renewed its multi-year contract with Wipro for global contact center support and other business process services.
Wipro has won a multi-year business process operations transformation contract from an Australian construction and property management company. The engagement will leverage Wipro’s AI, cognitive-driven automation and platforms to standardize and transform the client’s finance and HR operations into a global shared services model.
Wipro has been awarded a multi-year cargo management contract by LATAM Cargo S.A., a leader in air cargo transport to, from and within Latin America. Wipro will deploy its end to end cargo management system, CROAMIS, for the client.
Wipro has been awarded a multi-year quality engineering transformation contract by a leading African financial services company. Our proprietary platforms – Wipro AssureNXT and Wipro HOLMESTM will drive cost optimization as well as standardize and transform the quality engineering landscape for the client.
Digital Highlights
We continue to see increasing traction in digital oriented deals as illustrated below:
A global pharmaceutical company has selected Wipro to support its strategic assessment and go-to-market approach for its diagnostics business unit. The project will leverage Wipro's industry expertise and service design methodology to help define a futuristic strategy roadmap for the business unit.
Wipro has won an application modernization and cloud migration contract from a global financial services company, aimed at driving greater business agility and improved end-customer experience.
Wipro and Designit have been selected by a leading North American student aid organization to help transform and reimagine its customer experience across its loan portals through redesigned business processes and digital touchpoints.
Wipro also continues to win deals in the cloud applications space by leveraging Appirio Cloud Services:

  • An American retailer has extended its HR transformation contract with Wipro. This program will improve the customer experience as well as the employee satisfaction in its stores.
  • A large medical advocacy group has selected Wipro as a partner to transform its employee and member experience. Wipro will implement a cloud-based solution to enhance the group’s human capital management, payroll and finance operations.

Analyst Accolades and Awards
Wipro was recognized as a Leader in the Nelson Hall NEAT assessment on Business Process Transformation through RPA & AI.

Wipro was recognized as a Leader in IDC MarketScape for Worldwide Manufacturing Information Transformation Strategic Consulting 2018 Vendor Assessment.
Wipro was recognized as a Leader in Everest Group’s Know Your Customer-Anti Money Laundering (KYC-AML) BPO – State of the Market with Services PEAK Matrix™ Assessment 2018.
Wipro has been awarded the National Intellectual Property (IP) Award 2018 by Intellectual Property Office (IPO), Government of India and The Department of Industrial Policy and Promotion (DIPP), in the ‘Top Public Limited Company / Private Limited Company for Patents & Commercialization in India’ category.
All product names, logos, and brands are property of their respective owners.
IT Products

  • IT Products Segment Revenue for the quarter ended June 30, 2018 was Rs 3.5 billion ($51.6 million1).
  • IT Products Margin for the quarter was -20.9%.

Please refer 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 of the release 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, 2018, 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/wipro180720.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
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.

  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 68.46, as published by the Federal Reserve Board of Governors on June 30, 2018. However, the realized exchange rate in our IT Services business segment for the quarter ended June 30, 2018 was US$1= Rs 67.61.
  2. IT Services Margin refers to Segment Results Total.


(Rupees in millions, except share and per share data, unless otherwise stated)
 As of March 31, As of June 30,
  2018 2018 2018
      Convenience translation into US dollar in millions (unaudited) Refer footnote 1  
Goodwill 117,584                      121,610                          1,776
Intangible assets                       18,113                       17,868                            261
Property, plant and equipment                       64,443                       65,357                            955
Derivative assets                             41                             29                              –  
Investments                         7,668                         6,448                              94
Investment in equity accounted investee                         1,206                         1,212                              18
Trade receivables                         4,446                         4,179                              61
Deferred tax assets                         6,908                         6,724                              98
Non-current tax assets                       18,349                       19,269                            281
Other non-current assets                 15,726                     16,547                          242
Total non-current assets               254,484                   259,243                       3,786
Inventories                         3,370                         3,803                              56
Trade receivables                      100,990                       97,608                          1,426
Other current assets                       30,596                       26,415                            386
Unbilled receivables                       42,486                       26,691                            390
Contract assets  –                        18,209                            266
Investments                      249,094                      250,729                          3,662
Current tax assets                         6,262                         6,787                              99
Derivative assets                         1,232                         3,065                              45
Cash and cash equivalents                  44,925                    70,685                      1,033
                     478,955                    503,992                        7,363
Assets held for sale                  27,201                           –                             –  
Total  current assets                506,156                   503,992                      7,363
TOTAL ASSETS                 760,640                   763,235                    11,149
Share capital                         9,048                         9,048                            132
Share premium                            800                            861                              13
Retained earnings                      453,265                      472,454                          6,901
Share based payment reserve                         1,772                         1,958                              29
Other components of equity                   18,051                    15,332                         224
Equity attributable to the equity holders of the Company                      482,936                      499,653                          7,299
Non-controlling interest                     2,410                      2,172                          32
TOTAL EQUITY                 485,346                  501,825                      7,331
Long – term loans and borrowings                       45,268                       47,060                            687
Derivative liabilities                               7                              –                                –  
Deferred tax liabilities                         3,059                         2,407                              35
Non-current tax liabilities                         9,220                         8,925                            130
Other non-current liabilities                         4,230                         4,079                              60
Provisions                         3                            2                            –  
Total non-current liabilities                61,787                    62,473                          912
Loans, borrowings and bank overdrafts                       92,991                       70,668                          1,032
Trade payables and accrued expenses                       68,129                       75,530                          1,103
Unearned revenues                       17,139                       18,801                            276
Current tax liabilities                         9,417                       13,304                            194
Derivative liabilities                         2,210                         3,287                              48
Other current liabilities                       16,613                       16,575                            242
Provisions                        796                       772                            11
                   207,295                 198,937                       2,906
Liabilities directly associated with assets held for sale                      6,212                          –                              –  
Total current liabilities                  213,507                 198,937                       2,906
TOTAL LIABILITIES                  275,294                 261,410                       3,818
TOTAL EQUITY AND LIABILITIES                  760,640                 763,235                     11,149


(Rupees in millions, except share and per share data, unless otherwise stated)
 Three months ended June 30,
 2017 2018 2018
      Convenience translation into US dollar in millions (unaudited) Refer Footnote 1 
Gross revenues                     136,261                        139,777                          2,042
Cost of revenues                     (97,111)                       (100,350)                        (1,466)
Gross profit                     39,150                         39,427                           576
Selling and marketing expenses                     (10,146)                         (10,813)                             (158)
General and administrative expenses                       (7,264)                          (8,608)                             (126)
Foreign exchange gains/(losses), net                           353                              771                                11
Other Operating Income                             –                              2,529                                37
Results from operating activities                     22,093                         23,306                              340
Finance expenses                       (1,601)                          (1,649)                               (24)
Finance and other income                        6,327                            5,197                                76
Share of profits/(loss) of equity accounted investee                             (1)                               (53)                                (1)
Profit before tax                     26,818                         26,801                              391
Income tax expense                   (5,994)                      (5,865)                           (86)
Profit for the period                   20,824                      20,936                           305
Attributable to:     
Equity holders of the Company                      20,765                          21,206                              310
Non-controlling interest                         59                         (270)                             (5)
Profit for the period                   20,824                       20,936                           305
Earnings per equity share:     
Attributable to equity share holders of the Company    
Basic                          4.29                             4.71                             0.07
Diluted                          4.28                             4.70                             0.07
Weighted average number of equity shares used in     
computing earnings per equity share     
Basic            4,845,115,238                4,503,615,899                4,503,615,899
Diluted            4,851,070,943                4,511,794,217                4,511,794,217
Additional Information     
Segment Revenue     
IT Services Business Units     
BFSI                      34,934                          41,054                              600
HLS                      19,150                          18,209                              266
CBU                      20,535                          21,987                              321
ENU                      17,464                          17,205                              251
TECH                      17,664                          19,504                              285
MFG                      11,678                          11,304                              165
COMM                      8,831                         7,740                            113
IT SERVICES TOTAL                     130,256                        137,003                            2,001
IT PRODUCTS                        6,343                            3,532                                52
RECONCILING ITEMS                          15                             13                              –  
TOTAL                  136,614                     140,548                         2,053
Segment Result     
IT Services Business Units     
BFSI                        5,441                            7,149                              104
HLS                        2,734                            2,070                                30
CBU                        2,934                            2,615                                38
ENU                        3,651                            2,690                                39
TECH                        3,481                            4,064                                59
MFG                        1,694                            1,402                                20
COMM                        1,449                              754                                11
UNALLOCATED                           532                              695                                10
OTHER OPERATING INCOME                           –                            2,529                             37
TOTAL IT SERVICES                      21,916                          23,968                              348
IT PRODUCTS                            31                             (740)                               (11)
RECONCILING ITEMS                         146                             78                              1
TOTAL                     22,093                       23,306                           338
FINANCE EXPENSE                       (1,601)                          (1,649)                               (24)
FINANCE AND OTHER INCOME                        6,327                            5,197                                77
SHARE OF PROFIT/(LOSS) OF EQUITY ACCOUNTED INVESTEE                          (1)                            (53)                              –  
PROFIT BEFORE TAX                      26,818                          26,801                              391
INCOME TAX EXPENSE                    (5,994)                       (5,865)                            (86)
PROFIT FOR THE PERIOD                     20,824                         20,936                              305
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.

IT Services: The IT Services segment primarily consists of IT Service offerings to customers organized by industry verticals.
Effective April 1, 2018, consequent to change in organization structure, the Company reorganized its industry verticals. The
Manufacturing (MFG) and Technology Business unit are split from the former Manufacturing & Technology (MNT) business unit.
The revised industry verticals are as follows: Banking, Financial Services and Insurance (BFSI), Health Business unit (Health BU) previously known as Health Care and Life Sciences Business unit (HLS), Consumer Business unit (CBU), Energy, Natural
Resources & Utilities (ENU), Manufacturing (MFG), Technology (TECH) and Communications (COMM). IT Services segment
also includes Others which comprises dividend income relating to strategic investments, which are presented within “Financial and other Income” in the interim condensed consolidated 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.

Comparative information has been restated to give effect to the above changes.

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.

Reconciliation  of Non-GAAP Constant Currency IT Services Revenue to IT Services Revenue as per IFRS ($MN)
Three Months ended June 30, 2018
IT Services Revenue as per IFRS  $                     2,026.5   
Effect of Foreign currency exchange movement  $                          37.7  
Non-GAAP Constant Currency IT Services Revenue based on previous quarter exchange rates  $                     2,064.2  
Three Months ended June 30, 2018
IT Services Revenue as per IFRS  $                     2,026.5  
Effect of Foreign currency exchange movement  $                          (7.2)  
Non-GAAP Constant Currency IT Services Revenue based on exchange rates of comparable period in previous year  $                     2,019.3  


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