Wipro Limited Announces Results for the Quarter ended September 30, 2019 under IFRS

Operating Margin⁴ at 18.1%

EPS for the quarter grew by 36.7% YoY

BANGALORE, India & EAST BRUNSWICK, N.J.–(BUSINESS WIRE)–#EPS–Wipro Limited (NYSE: WIT) (BSE: 507685) (NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for its quarter ended September 30, 2019.

Highlights of the Results

Results for the Quarter ended September 30, 2019:

• Gross Revenue was Rs. 151.3 billion ($2.1 billion¹), an increase of 4.0% YoY
• IT Services Segment Revenue was at $2,048.9 million, an adjusted² increase of 2.5% YoY
• Non-GAAP³ constant currency IT Services Segment Revenue increased by 1.1% QoQ. Adjusted² Non-GAAP³ constant currency IT Services Segment Revenue grew 3.8% YoY
• IT Services Operating Margin⁴ for the quarter was at 18.1%, an increase of 3.1% YoY
• Net Income for the quarter was Rs. 25.5 billion ($361.4 million¹), an increase of 35.1% YoY
• EPS for the quarter was Rs. 4.3 ($0.06¹) per share and grew 36.7% YoY

Performance for the quarter ended September 30, 2019

Abidali Z. Neemuchwala, CEO and Managing Director said, “We had a good in-quarter execution on both revenues and margins. The overall growth was broad based with 6 out of 7 industry verticals growing on a YoY basis and we signed a large deal in India aligned to our strategy of taking global offerings to India customers.”

Jatin Dalal, Chief Financial Officer said, “We delivered operating margins in a tight range after absorbing the impact of two months of wage hike. Growth remains our priority and we remain invested for future. We also successfully completed the Share Buyback program in September, which saw strong participation from our investors.”

Outlook for the Quarter ending December 31, 2019

We expect Revenue from our IT Services business to be in the range of $2,065 million to $2,106 million*. This translates to a sequential growth of 0.8% to 2.8%.

* Outlook is based on the following exchange rates: GBP/USD at 1.23, Euro/USD at 1.11, AUD/USD at 0.68, USD/INR at 70.59 and USD/CAD at 1.32

Share Buyback Update

In the quarter ended September 30, 2019, the Company has concluded the buyback of 323.1 million equity shares as approved earlier by the Board of Directors at their meeting held on April 16, 2019. This has resulted in a total cash outflow of Rs. 105 billion ($1.49 billion¹).

IT Services

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

• Wipro has secured a multi-year engagement with a top North America based global bank to provide DevOps services which will enable the bank to launch new products swiftly and go-to-market faster at an optimal cost.
• Wipro has won a transformation deal with a leading digital media and broadcasting company to digitize their enterprise processes to deliver better stakeholder experience.
• A large US-based healthcare company has renewed its contract with Wipro to automate its claims process and improve efficiency, leveraging the capabilities of Wipro HOLMES™.
• A UK-based global software company has awarded Wipro a contract to build, test, and transform its IT operations across core business applications including finance, sales and customer relationship management.
• A major European industrial manufacturing company has renewed and expanded its existing contract with Wipro for workplace digitalization and service desk support.

Digital & Cloud Application Services Highlights

We continue to see increasing traction in digital oriented deals as illustrated below:

• A global e-commerce and internet company has chosen Appirio to streamline the customer relationship management process for its employees by migrating to a cloud-based customer service platform.
• A leading US-based medical technology company has chosen Wipro to automate its key business processes for enhanced user experience and cost optimization.
• A multinational publication and media company has selected Wipro to implement a newly launched digital subscription management product, enabling seamless integration of its various internal functions as well as transform the client’s user experience.
• A large telecommunications company has awarded Wipro a multi-year deal to provide network test automation and crowdsourcing engagement services leveraging Topcoder.
• A US-based university has chosen Appirio to help migrate to a new cloud-based system, which will enable the institution to centralize their data and derive sharper insights.

Analyst Accolades and Awards

• Wipro was positioned as a Leader in The Forrester Wave™: Application Modernization And Migration Services, Q3 2019
• Wipro positioned as a Leader in Gartner Magic Quadrant for Data Center Outsourcing and Hybrid Infrastructure Managed Services, Asia/Pacific, DD Mishra, To Chee Eng, Claudio Da Rold, 24 Jul-2019
• Wipro was positioned as a Leader in The Forrester Wave™: AI Consultancies, Q3 2019
• Wipro was positioned as a Leader in IDC MarketScape: Worldwide Professional Services Firms for Utilities Customer Experience 2019 Vendor Assessment. (Doc #US43251618, July 2019)
• Wipro was positioned as a Leader and Star Performer in Everest Group Banking BPS – Service Provider Landscape with Services PEAK Matrix™ Assessment 2019
• Wipro was positioned as a Leader in Everest Group Life Sciences Digital Services – Service Provider Landscape with Services PEAK Matrix™ Assessment 2019
• Wipro positioned as a Leader in multiple quadrants in ISG Provider Lens™ Network – Software Defined Solutions & Services, Global, UK & Nordics

Disclaimer: Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

IT Products

• IT Products Segment Revenue for the quarter was Rs. 3.2 billion ($45.8 million¹).
• IT Products Operating Margin⁴ for the quarter was 4.6%.

India business from State Run Enterprises (SRE)

• India SRE Segment Revenue for the quarter was Rs. 2.1 billion ($29.3 million¹).
• India SRE Operating Margin⁴ for the quarter was –8.5%.

Please refer to the table at the end for reconciliation between IFRS IT Services Revenue and IT Services Revenue on a non-GAAP constant currency basis and adjustments for divestment.

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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 tables at the end provide 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. Further, in the normal course of business, we may divest a portion of our business which may not be strategic. We refer to the growth rates in both reported and constant currency adjusting for such divestments in order to represent the comparable growth rates.

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 September 30, 2019, 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- https://links.ccwebcast.com/?EventId=WIP20191015

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 175,000 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. 70.64, as published by the Federal Reserve Board of Governors on September 30, 2019. However, the realized exchange rate in our IT Services business segment for the quarter ended September 30, 2019 was US$1= Rs. 71.56.
2. YoY growth rates for Q2’20 have been computed by adjusting revenues for Q2’19 for the impact from the divested Workday and Cornerstone on Demand business.
3. Constant currency revenue for a period is the product of volumes in those period times the average actual exchange rate of the corresponding comparative period.
4. Operating Margin refers to Segment Results Total as reflected in IFRS financials.

IT Services: 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), Health Business Unit (Health BU), Consumer Business Unit (CBU), Energy, Natural Resources & Utilities (ENU), Manufacturing (MFG), Technology (TECH) and Communications (COMM). 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.

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.

India State Run Enterprise segment (ISRE): This segment consists of IT Services offerings to entities/ departments owned or controlled by Government of India and/ or any State Governments.

The Chairman of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by IFRS 8, “Operating Segments.” The Chairman of the Company evaluates the segments based on their revenue growth and operating income.

Assets and liabilities used in the Company’s business are not identified to any of the operating segments, as these are used interchangeably between segments. Management believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

Contacts

Contact for Investor Relations
Aparna Iyer

Phone: +91-80-6142 7139

iyer.aparna@wipro.com

Abhishek Kumar Jain

Phone: +91-80-6142 6143

abhishekkumar.jain@wipro.com

Contact for Media & Press
Vipin Nair

Phone: +91-80-6142 6450

vipin.nair1@wipro.com