Wipro announces financial results



Highlights of the Results:

  • Wipro Limited Gross Revenues were `128.6 billion ($1.9 billion1), an increase of 7% YoY
  • IT Services Segment Non-GAAP constant currency Revenue in dollar terms grew 1.4% sequentially and grew 6.3% YoY. IT Services Segment Revenue was $1,838.3 million, a sequential increase of 0.3%
  • IT Services Segment Revenue was `123.1 billion ($1,861 million1), an increase of 9% YoY
  • Net Income2 was `22.3 billion ($338 million1), an increase of 2% YoY
  • IT Services Segment Profit3 was `24.8 billion ($375 million1)
  • IT Services Segment Margins was 20.2%
  • Headcount increased by 2,268 to 170,664
  • Wipro declared an interim dividend of `5 ($0.08) per share /ADS

Performance for the quarter ended December 31, 2015
T K Kurien, Member of the Board & Chief Executive Officer of Wipro, said – “We delivered Revenues in line with our guidance. We saw a pick-up in large deal closures led by Global Infrastructure Services. It is becoming increasingly clear that customers want to simplify operations and optimize their IT spend while investing in Digital to transform their business. We are well-positioned to take advantage of this trend.”

Abidali Z. Neemuchwala, Chief Executive Officer-Designate of Wipro, said – “We are focused on driving market share growth in our core businesses through integrated domain and technology services while investing for the future in building differentiated Digital capabilities. We will leverage our strong culture of innovation and extremely talented employee pool to build compelling value propositions for our customers.”

Jatin Dalal, Chief Financial Officer of Wipro, said – “During the quarter, we have built competitive differentiation through the acquisition of two high-potential companies – cellent and Viteos. The impact on revenues from the Chennai floods were minimized significantly by strong execution of our robust Business Continuity Plans (BCP). The additional expenses incurred in deploying BCP impacted operating margins for the quarter.”

Outlook for the Quarter ending March 31, 2016
We expect Revenues from our IT Services business to be in the range of $ 1,875 million to $1,912 million*.

* Guidance is based on the following exchange rates: GBP/USD at 1.50, Euro/USD at 1.07, AUD/USD at 0.72, USD/INR at 66.13 and USD/CAD at 1.37

IT Services

The IT Services segment had a headcount of 170,664 as of December 31, 2015. We added 39 new customers during the quarter.

Effective January 1, 2016, Wipro completed the transaction announced on December 2, 2015 to acquire cellent AG, a leading IT consulting and software services company in the DACH region of Germany, Austria and Switzerland.

On December 23, 2015, Wipro announced that it has signed a definitive agreement to acquire Viteos Group, a BPaaS provider for the Alternative Investment Management Industry.

Wipro sustained its momentum in winning Large Deals globally as described below:

Wipro has entered into a multi-year global infrastructure support engagement with one of the largest medical devices companies in the world. Wipro will standardize and simplify the customer’s IT infrastructure across multiple service lines and in over 90 countries.

A leading global nutrition, health and wellness company has selected Wipro to enable the migration of a significant portion of its global IT applications estate to a hybrid cloud.  As part of the engagement, Wipro will provide IaaS (Infrastructure as a Service), PaaS (Platform as a Service), an integrated hardware-software-services stack, and billing-metering-chargeback in a completely outcome-based model.

A large global retailer has selected Wipro as its quality engineering partner.  Wipro will help develop a new operating and financial model that will allow the customer to accurately forecast its quality engineering spends and optimize costs while driving continuous improvements in the quality and time-to-market of its offerings.

Wipro has won a large contract from a European general insurance multinational for provisioning and managing the company’s infrastructure.

A leading security solutions manufacturer, headquartered in the Nordic region, has selected Wipro to transform its IT infrastructure. As part of the five-year agreement, Wipro will leverage its Boundaryless Datacenter offering and will consolidate the customer’s existing data centers  and implement a cloud-based-services model, including  IaaS (Infrastructure as a Service) and PaaS (Platform as a Service).

An Australia-headquartered manufacturing sector customer has awarded a five-year strategic, IT-as-a-service contract to Wipro. Wipro will have the end-to-end responsibility of running the customer’s IT operations and enabling the transformation of the existing IT estate to a next-generation digital-ready landscape. The new consumption-based model will enable the customer to be more agile, reliable and competitive while launching new products and services.

Digital highlights

Our Digital capability combining design, engineering, and analytics is seeing traction in the marketplace. Unique capabilities of Designit combined with Wipro’s technological prowess is driving synergistic deal wins.

Wipro has been selected to help a global bank establish and operate its new digital platform, across 50 markets.  With global scale and a blend of strategy, design and engineering capabilities, Wipro’s agile teams will help support consistent customer experience, underpinned by continuous delivery across this new digital platform.  Wipro will reinvent the onboarding process for customers, help improve sales conversion rates and reduce operational costs.

Wipro has won a multi-year deal from a large bank to enable omni-channel self-service by digitizing service processes and leveraging new age digital technologies. This will help the bank provide superior customer experience while reducing costs, in the form of lower call volumes.

Wipro will be augmenting the in-house team of a market leader in the automotive space, with telematics domain skills and advanced engineering expertise for their telematics program.

Designit has been selected by a leading South American bank to work on designing an entirely new banking concept and experience, targeted to create the next-generation banking experience for customers who are usually not attracted to traditional banking offerings anymore.

For a major German telecommunications brand, Designit has been assigned to create future smart Product-Service-Experiences using artificial intelligence and similar emerging technologies.

For a leading European energy provider, Designit has been selected to design an innovation process to better facilitate the company’s investments into technology start-ups and to effectively drive the integration of acquired start-ups into the client’s own organizational portfolio.

Cloud highlights

Our Cloud applications business is seeing a good traction in the market. In the quarter ending December 31, 2016 we engaged with several clients to design and deploy their enterprise processes leveraging industry-leading SaaS products. A few marquee engagements include Cloud CRM processes rationalization for a UK-based gas and utility major, simplification of lead & opportunity management processes for a leading US based equipment rental company, modernization of  a B2B order management system for a leading chemicals supplier company, design and deployment of recruitment processes for a business process outsourcing enterprise, implementation of performance and goal management processes for an American satellite service provider and transforming the source-to-pay process for an global pharmaceutical and consumer packaged goods major.

Wipro has also partnered with Apttus, the category-defining Quote-to-Cash cloud solution provider, to deliver best-in-class Contract Lifecycle Management (CLM), Configure-Price-Quote (CPQ) & Revenue Management solutions to clients across industries.

Awards and accolades

Wipro continued to lead the ‘Global Engineering and R&D Service Providers (GSPR) Rating 2015’ by Zinnov Management Consulting for the sixth consecutive year. The Zinnov study evaluated more than 75 R&D service providers across the world in 15 major industry segments across key parameters like product development capabilities & innovation, client relationships, human capital, financials, ecosystem linkages, infrastructure, and business sustainability.

Wipro has been positioned as a “Leader” by Forrester Research Inc, in its report ‘The Forrester Wave™: Global Workplace Services, Q4 2015’. The report cites Wipro’s relative strength in infrastructure services delivery, well-balanced staff distribution across EMEA, North America and Asia-Pacific, highest overall customer reference scores of any supplier evaluated in the analysis, strong customer value proposition, and compelling vision for workplace services.

Wipro has been positioned as a “Leader” by in the IDC MarketScape: Worldwide Life Science Manufacturing and Supply Chain 2015 vendor assessment for services in all the 3 service categories of strategic consulting, ITO and BPO.

Wipro has been recognised as a “Leader” by leading global analyst firm Everest Group, in the Healthcare Payer Digital IT Services PEAK Matrix Assessment 2015. This reaffirms our growing capabilities in the Healthcare Digital space.

Wipro has also been featured as a “Star Performer” in the Everest Group Healthcare Provider IT Services PEAK Matrix Assessment 2015. This reflects Wipro’s large scale and deeper client relationships, technology capability and investments in tools, platforms, and a global delivery presence in the Healthcare Provider space.

Wipro has been recognised as a “Leader” in the Gartner Magic Quadrant for Application Testing Services, Worldwide for the second consecutive year.

Wipro has been positioned in the ‘Winner’s Circle’ of HfS Blueprint Report on Trust-as-a-Service 2015. The report covers the market view of Digital Trust and Security Framework, the Digital Trust Maturity Scale, and the As-a-Service Economy.

Wipro has won 8 awards at the seventh Annual Golden Bridge Business and Innovation Awards Ceremony including the Grand Trophy Award for being the overall winner with maximum impact. Wipro was recognized for its innovations in API Management and Solutions, Information Technology (Software), Mobile Innovative Products or Services, Business Process Management and Application Development.

IT Products

  • Our IT Products Segment delivered Revenue of `6.5 billion ($98 million1) for the quarter ended December 31, 2015

Please refer to the table on page 7 for reconciliation between IFRS IT Services Revenue and IT Services Revenue on a non-GAAP constant currency basis.

About Non-GAAP financial measures

This press release contains non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K. Such non-GAAP financial measures are measures of our historical or future performance, financial position or cash flows that are adjusted to exclude or include amounts that are excluded or included, as the case may be, from the most directly comparable financial measure calculated and presented in accordance with IFRS.

The table on page 7 provides IT Services Revenue on a constant currency basis, which is a non-GAAP financial measure that is calculated by translating IT Services Revenue from the current reporting period into U.S. dollars based on the currency conversion rate in effect for the prior reporting period.   We refer to growth rates in constant currency so that business results may be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance.

This non-GAAP financial measure is not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, the most directly comparable financial measure calculated in accordance with IFRS, and may be different from non-GAAP measures used by other companies. In addition to this non-GAAP measure, the financial statements prepared in accordance with IFRS and the reconciliation of these non-GAAP financial measures with the most directly comparable IFRS financial measure should be carefully evaluated.

Results for the quarter ended December 31, 2015, prepared under IFRS, along with individual business segment reports, are available in the Investors section of our website www.wipro.com.

Quarterly Conference Call
We will hold an earnings conference call today at 11:00 a.m. Indian Standard Time (12:30 a.m. US Eastern Time) to discuss our performance for the quarter. An audio recording of the management discussions and the question and answer session will be available online and will be accessible in the Investor Relations section of our website at www.wipro.com.