Wipro announced Q4 FY20 financial results

Posted by Wipro

Wipro Limited announced financial results under International Financial Reporting Standards (IFRS) for its quarter and year ended March 31, 2020.

Highlights of the Results

Results for the Year ended March 31, 2020:

• Gross Revenue was ₹2 billion ($8.1 billion¹), an increase of 4.2% YoY
• IT Services Segment Revenue was at $8,256.2 million, grew at 1.7% YoY
• Non-GAAP^2&3 constant currency IT Services Segment Revenue increased by 3.9% YoY
• IT Services Operating Margin⁴ for the year was at 18.1%, an expansion of 0.2% YoY
• Net Income for the year was ₹2 billion ($1.3 billion¹), an increase of 8.0% YoY
• EPS for the year was ₹67 ($0.22¹) per share and grew 11.2% YoY

Results for the Quarter ended March 31, 2020:

• Gross Revenue was Rs. 1 billion ($2.1 billion¹), an increase of 4.7% YoY
• IT Services Segment Revenue was at $2,073.7 million, a decrease of 1.0% QoQ
• Non-GAAP3 constant currency IT Services Segment Revenue increased by 0.4%QoQ
• IT Services Operating Margin4 for the quarter was at 17.6%, a decrease of 0.8% QoQ
• Net Income for the quarter was Rs. 3 billion ($308.5 million1), a decrease of 6.3% YoY
• EPS for the quarter was Rs. 09 ($0.051) per share, a decrease of 1.1% YoY
• The Board has not recommended any final dividend. The interim dividend of Rs. 1 declared by the Board at its meeting held on January 14, 2020 shall be considered as the final dividend for the financial year 2019-20. Thus, the total dividend for the financial year 2019-20 remains Rs. 1 per equity share

Performance for the quarter & year ended March 31, 2020

Abidali Z. Neemuchwala, CEO and Managing Director said, “In these unprecedented times, I am extremely proud of how the Wipro team has come together and worked 24/7 to ensure the safety and well-being of each other while continuing to serve our clients. We hope that all of us stay safe and strong during these tough times. We are confident that our broad portfolio of services and our ability to execute to our commitments makes us well-positioned to gain market share.”

Jatin Dalal, Chief Financial Officer said, “The quarters ahead seem challenging and require a tremendous response on costs. We also anticipate our working capital to increase, but our strong balance sheet provides us the confidence that we will emerge stronger and better. Further, due to the volatility in the external environment, we have decided not to provide a quarterly guidance on revenues.”

We estimate that the IT Services Revenues for the quarter ended March 31, 2020 were negatively impacted by COVID-19 by approximately $14 -$16 million(0.7%-0.8% of revenues). Due to the uncertainty around the course of the COVID-19 pandemic, we do not have visibility into the extent to which it will disrupt our operations, and we have decided to not provide revenue guidance for the quarter ending June 30, 2020.  We anticipate that we will resume providing revenue guidance when we have increased certainty of both demand and supply side factors.

IT Services

Wipro continued its momentum in winning deals globally as described below:

• Wipro has won a multi-year engagement in Mexico with one of the world’s largest Spanish language media companies to redefine their workplace experience. This engagement enables their digital strategy to deliver enhanced user experience and move to a flexible and secure model leveraging VirtuaDesk™, Wipro’s digital IP, and security expertise. Wipro will also leverage its deep media expertise and innovation to enable the client in their long-term business objectives.
• A large US-based healthcare company has awarded Wipro a multi-year contract to transform its contact center operations using Design Thinking, AI Automation & Analytics leveraging Wipro HOLMES™ and other digital technologies.
• A multinational professional services firm has awarded Wipro a Digital Workspace Services contract under which Wipro will provide IT support and transform the end user experience for its employees globally, leveraging its design-led approach.
• Wipro has won a multi-year engagement with a top Australian utility company for modernizing their core back-office platform leveraging SAP S/4 HANA digital core. This program will enable the client to consolidate and streamline their Corporate Finance, Supply Chain & Procurement functions in a single integrated platform.

Wipro continued to partner with our customers during Covid-19, some examples of how we collaborated are below:

• Our customer, an American food service, facilities, and uniform services provider caters to over 5000 client locations across the US, majority of which are now inaccessible due to the COVID-19 pandemic. The company’s Chief Growth Officer collaborated with Wipro to map nursing homes in these locations that may be in dire need of help and which could be serviced by the local task teams. We successfully developed a Google Distance Matrix API based solution to map the top 10 service locations that could aid nursing homes in their serviceable regions. Especially for the New York state nursing homes that are more severely affected than most, we could provide same day location mapping results for priority outreach. This solution now has the ability to cover all nursing homes, enabling our customer to take its humanitarian effort nationwide.
• One of the European governments recently announced multi – billion in loans for corporates to avail during the COVID-19 crisis. Within a span of 3 days, we helped our customer, one of the largest banks in Europe, update and go-live with their loan processing applications to ensure their corporate customers’ businesses stay up and running. These applications can now process interest-free loans in just 15 minutes, and so far, nearly 10,000 of the bank’s corporate customers have benefited immensely.
• Amidst the COVID-19 crisis, we helped our customer, a Postal Services company in Middle East, launch a special medicine delivery service as a part of the government’s quick response for citizens.
• Even amidst the operational issues posed by the pandemic, we were able to help our client, a clothing retailer in South Africa, successfully go-live with a large Oracle retail implementation. This is an example of a 100% ‘remote’ cutover, and has enabled the client to optimize its operations significantly to serve their customers.

Analyst Recognition

• Wipro was recognized as the “Star Performer of the year” in Everest Group PEAK Matrix™ Service Provider of the Year awards
• Wipro was positioned as a Leader in Gartner Magic Quadrant for Managed Workplace Services, Europe, David Groombridge, 25 Feb 2020
• Wipro was named as a Leader in Gartner Magic Quadrant for Managed Workplace Services, North America, Daniel Barros, 25 Feb 2020
• Wipro was positioned as a Leader in IDC MarketScape: Worldwide Business and Industrial IoT Consulting and Systems Integration Services 2020 Vendor Assessment. (Doc #US46120820, March 2020)
• Wipro was positioned as a Leader in IDC MarketScape: Worldwide Business and Industrial IoT Engineering and Managed Services 2020 Vendor Assessment. (Doc #US46121220, March 2020)

IT Products

• IT Products Segment Revenue for the year was Rs. 0 billion ($146.0 million¹)
• IT Products Segment Results for the year was a loss of Rs. 28 billion ($3.7 million¹)
• IT Products Segment Revenue for the quarter was Rs. 8 billion ($37.0 million¹)
• IT Products Segment Results for the quarter was a profit of Rs. 12 billion ($1.5 million¹)

India business from State Run Enterprises (SRE)

• India SRE Segment Revenue for the year was Rs. 4 billion ($111.4 million¹)
• India SRE Segment Results for the year was a loss of Rs. 8 billion ($24.2 million¹)
• India SRE Segment Revenue for the quarter was Rs. 3 billion ($31.1 million¹)
• India SRE Segment Results for the quarter was a loss of Rs. 48 billion ($6.4 million¹)

―CT Bureau