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Wipro Q3 profitability at 22-quarter high

Wipro Limited today announced financial results under International Financial Reporting Standards (IFRS) for the quarter ended December 31, 2020.

Highlights of the Result
Results for the Quarter ended December 31, 2020:

  • Gross Revenue was ₹7 billion ($2.1 billion), an increase of 3.7% QoQ and 1.3% YoY
  • IT Services Segment Revenue was at $2,071 million, a sequential growth of 9%
  • Non-GAAP2 constant currency IT Services Segment Revenue increased by 3.4% QoQ
  • IT Services Operating Margin for the quarter was at 21.7%, an expansion of 243 bps QoQ and 329 bps YoY
  • Net Income for the quarter was ₹7 billion ($406 million), an increase of 20.8% YoY
  • Earnings Per Share for the quarter was at ₹21 ($0.07), an increase of 20.7% YoY
  • Operating Cash Flow was at ₹3 billion ($607 million), which is 149.4% of Net Income
  • Wipro declared an interim dividend of ₹1 ($0.014) per equity share/ADS

Performance for the quarter ended December 31, 2020
Thierry Delaporte, CEO and Managing Director said, “Wipro has delivered a second consecutive quarter of strong performance on order booking, revenue and margins. Five of our sectors grew over 4% sequentially. We closed our largest ever deal win in Continental Europe. The demand environment is steadily improving, especially for digital transformation, digital operations, and cloud services. I am also pleased to share with you that we have moved into our new organization structure and are stabilizing quickly.”

Jatin Dalal, Chief Financial Officer said, “Our margins are now at a 22 quarters high. The expansion was led by improved revenue growth trajectory and excellence in operations with several metrics at an all-time high. Our Operating Cash Flows grew by 45% YoY with a significant improvement in outstanding receivables.”

Outlook for the quarter ending March 31, 2021
We expect Revenue from our IT Services business to be in the range of $2,102 million to $2,143 million. This translates to a sequential growth of 1.5% to 3.5%.

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

  • Wipro has secured a contract for the upstream and downstream business of a UK-based energy company to transform their existing application maintenance services to a DevOps model, aligned with their new digital organization. This will enable the client to be more agile and respond swiftly to the changing business demands while ensuring cost
  • Wipro has won an engagement with a global new-age technology corporation to provide B2B customer and technology support for their business communication Wipro will also provide account review services to determine any unauthorized access, and offer Quality as a Service (QaaS) to the client.
  • Wipro has won an engagement with a US-based public relations and media services company to streamline its operations across US, Canada, UK, Europe, India, and APAC, in addition to consolidating its supplier
  • Wipro has secured a contract from a large US-based telecom service provider to manage their sales support and sales request functions for the order management process. As part of the engagement, Wipro will bring about technology transformation to reduce the cycle time for order processing, ensuring faster deployment of
  • A global energy corporation has awarded Wipro a multi-year contract to provide digital The engagement includes support and development of business and enterprise applications for the upstream, midstream and downstream lines of business and corporate functions of the company.

Digital & Cloud Application Services Highlights
We continue to see increasing traction in digital oriented deals as illustrated below:

  • A global beverage company has selected Designit, a Wipro company, to support a new product and service in the area of public and semi-public Designit will analyze market and consumer insights and create vision concepts for the launch.
  • A US-based network software provider has awarded Wipro a contract to co-develop their 5G Radio Unit product and variants for global markets. The deal encompasses system architecture, software/hardware design, development, integration and validation to enable the customer achieve faster and cost-effective time-to-market.
  • A European multinational manufacturing company has awarded Wipro a contract to provide cloud managed services, application testing platforms and managed security services. Wipro will provide innovative solutions for Cloud access security, application security and vulnerability management using AI-based orchestration & automation.
  • Wipro’s crowdsourcing platform Topcoder has won an engagement with a leading US-based pharmaceutical company to provide on-demand digital talent and development capability to their R&D Data Science Team. As part of the engagement, Topcoder’s Platform and Data Science Community was leveraged to validate a COVID prediction model, operationalize it for use with customer data, and develop visualizations for the effort, all in under four weeks. The client had worked with Topcoder in June 2020 to plan for COVID vaccine
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