Bangalore, India and East Brunswick, New Jersey, USA – January 25, 2017 -- Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for its third quarter ended December 31, 2016.
Highlights of the Results
- Gross Revenues were 136.9 billion ($2 billion1), an increase of 6.4% YoY.
- Net Income2 was 21.1 billion ($309 million1), a decrease of 5.7% YoY.
- Non-GAAP constant currency IT Services Segment Revenue in dollar terms grew 0.6% sequentially and grew 6.2% YoY.
- IT Services Segment Revenue was $1,902.8 million, a sequential decrease of 0.7% and YoY increase of 3.5%
- IT Services Segment Revenue in Rupee terms was 132.0 billion ($1.9 billion1), an increase of 7.2% YoY.
- IT Services Segment Profits3 was 24.2 billion ($355 million1), a decrease of 1.3% YoY.
- IT Services Margins4 was 18.3% for the quarter, as compared to 17.8% for the quarter ended September 30, 2016.
- Wipro declared an interim dividend of 2 ($0.031) per share/ADS.
Performance for the quarter ended December 31, 2016
“Our bold investments in Digital, BPaaS and cloud applications position Wipro as the partner of choice for the Digital businesses of our clients. Digital eco-system grew by 9.9% sequentially in the quarter and now constitutes 21.7% of our revenues”, said Abidali Z. Neemuchwala, Chief Executive Officer and Member of the Board. “In the last year, we have invested almost $1 billion in acquisitions, made 6 investments through Wipro Ventures, funded 8 ideas through our Horizon program, and continued to invest aggressively in our cognitive platform, Wipro HOLMES and in our stated localization strategy.”
“We expanded operating margins by 50 basis points in a seasonally weak quarter and generated strong operating cash flows by disciplined execution.” said Jatin Dalal, Chief Financial Officer. “We are significantly leveraging HOLMES, our automation suite to drive efficiencies in our operations.”
Outlook for the Quarter ending March 31, 2017
We expect Revenues from our IT Services business to be in the range of $ 1,922 million to $ 1,941 million*.
* Guidance is based on the following exchange rates: GBP/USD at 1.23, Euro/USD at 1.04, AUD/USD at 0.74, USD/INR at 67.73 and USD/CAD at 1.34.
- For the convenience of the reader, the amounts in Indian Rupees in this release have been translated into United States Dollars at the noon buying rate in New York City on December 30, 2016, for cable transfers in Indian Rupees, as certified by the Federal Reserve Board of New York, which was US $1= 67.92. However, the realized exchange rate in our IT Services business segment for the quarter ended December 31, 2016 was US$1= 69.35
- Net Income refers to ‘Profit for the period attributable to equity holders of the Company’
- Segment Profit refers to segment results. Effective April 1, 2016, the segment results is measured after including the amortization charge for acquired intangibles to the respective segments. Such costs were classified under reconciling items until the fiscal year ended March 31, 2016. Comparative information has been restated to give effect to the same.
- Margins have been computed based on the change as listed in footnote 3. above
The IT Services segment had a headcount of 179,129 as of December 31, 2016.
Wipro has won a multi-year engagement with a leading Engineering & Construction major to transform their services business by modernizing their facility management platform and back office operations, leveraging Wipro’s digital and platform-as-a-service offerings. This program will enable the client to be competitive in the market place and deliver value to their end-customers.
Wipro has won a multi-year engagement with a large financial services company in Australia to provide application support, development and testing services. This program, which will leverage Wipro’s IP, DevOps and Agile frameworks, will help transform the client’s delivery capabilities across services.
A leading Australian Banking Group that has retail, commercial and wealth management products has chosen Wipro as a key transformation partner for Testing, Test Environment management and Digital Assurance. The engagement involves the convergence of the testing and engineering functions across multiple domains and a progressive automation approach that aligns to the multi-speed operating model of the Bank.
A leading UK-based bank has renewed an ongoing engagement with Wipro for a period of 3 years. Wipro will continue to provide core banking operations-related services for the client’s investment banking, corporate banking and wealth management operations.
A leading manufacturer of paint products in Australia has selected Wipro as its strategic IT partner to manage and transform its IT landscape as part of its digital journey. Wipro will leverage its digital and Wipro HOLMES Artificial Intelligence PlatformTM capabilities in the manufacturing domain to deliver services and solutions to help achieve the customer’s business goals.
A leading Latin America-based retailer has extended a multi-year application management services (AMS) contract with Wipro. The engagement involves the transformation of the retailer’s applications landscape through standardization and automation of processes.
Wipro has won an IT infrastructure services engagement with the North Lanarkshire Council in Scotland. This program will enable the Council to provide innovative and improved services to its customers.
A large restaurant franchise chain in Latin America has awarded a multi-process, multi-year Business Process Services engagement to Wipro to support its Finance and accounting (F&A) and HR-Payroll functions.
Wipro has been cited as a Leader in The Forrester WaveTM: BPM Service Providers, Q4 2016. The Forrester report recognizes Wipro for cutting edge design practices to large-scale process transformation, next-generation capabilities for helping clients undertake large-scale transformation for digital business automation, innovative methodologies that combines design thinking and customer experience design concepts and an instant infusion of top design talent to help extend its BPM consulting engagements.
Wipro has been ranked as a “leader” in the ‘Zinnov Zones for Digital Services in Retail – 2016’ research report by Zinnov Management Consulting. Wipro was ranked in the leadership Zone and was ranked as one of the top digital services providers for retailers in the assessment done basis capabilities and client feedback.
Wipro Digital has been engaged to lead a DevOps transformation initiative at a global bank. Wipro will support Process Consulting, Training & Coaching, DevOps engineering and Enterprise Architecture, and Blueprint definition and implementation.
A large US-based publishing company has selected Wipro to identify new market segments and develop differentiated digital offerings.
Wipro Digital and Designit will develop a Small-Medium Enterprise proposition for a global, Europe-based bank to identify the needs and opportunities for this market segment.
Wipro has been chosen as a digital partner by a global fashion brand to implement an end-to-end B2C IoT solution on wearable technology. The solution will also be used for online transactions, branding, and various customer loyalty programs.
Wipro Digital has been selected by a leading digital and technology company to develop a customer engagement app for use within the retail environment. This app will be used by hundreds of employees to record sales and customer interactions.
A few of the notable wins in Cloud Applications are as follows:
- Wipro was selected as a partner to transform the Sales, Service & Quote to Cash processes leveraging leading cloud platforms for an organization which engineers, manufactures and sells 3D printers.
- A leading APAC bank selected Wipro to design and deploy their front office applications using a leading cloud application platform.
- Wipro is helping a global belting company to redesign and deploy a source-to-pay process using an emerging SaaS platform.
- A leading American financial services firm selected Wipro to architect a cloud-based solution to improve the client engagement across all functions and business units.
- Wipro has been selected by a global medical devices company to enhance their contact center processes into a single cloud platform to facilitate a quicker response to medical emergencies.
- A large multinational courier delivery services company has awarded a contract to Wipro for testing their cloud-based HCM applications suite.
“We told Wipro we want to be the first company after liberalization in the market with a new solution. That gave us 5 months to implement the solution. Wipro acted as a leader from day one of the project. They were ready with project deliverables and project teams, which made it easier for my team and our organization to follow. We have now the most competitive digital solution in the Danish market” said Jesper Bak Olesen, CEO, NRGi Elsalg
Wipro has deployed a Master Data Management (MDM) for one of the largest multi-channel specialty retailers of home furnishings and gourmet cookware. The solution helped the retailer realize $10 Million savings and enabling improved customer marketing campaigns, cross-selling and up-selling across brands, reduced marketing costs and better customer service.
Wipro successfully delivered Data Lineage reports for BCBS 239 compliance for a bank in the US. In this engagement, Wipro leveraged its IP tool Next Gen DI, which provides ability to calculate and generate the end-to-end data lineage after ingesting metadata from data management applications. As part of this engagement, Wipro delivered 95% automation in the compliance reporting process and cut down the delivery cycle time for compliance reports significantly.
Awards and accolades
Wipro was recognized as the ‘Best Collaboration Partner’ by Land Transport Authority (LTA), Singapore at the Land Transport Excellence Awards 2016. The award recognizes the partner who has demonstrated the highest level of commitment to collaborate and deliver smart solutions that contribute towards land transport transformation with LTA.
Wipro and Asahi Beverages, the Australia New Zealand business of the Japanese beverage giant, were jointly recognized for the ‘Best BPO Sourcing’ partnership of 2016 by the ANZ Paragon Awards™, presented by Information Services Group, a leading technology insights, market intelligence and advisory services company.
Wipro has been recognized as a ‘Leader’ in the report ‘IDC MarketScape: Worldwide Datacenter Transformation Consulting and Implementation Services 2016 Vendor Assessment’. As per IDC, Wipro's DCT portfolio includes consulting, transformation, cloud, and managed services within the company's datacenter and cloud practice, which is built around its BoundaryLess Data Center (BLDC) framework.
Wipro was positioned in the ‘Winner’s Circle’, as a leading PLM service provider, by HfS Research – a leading analyst firm - in its report ‘HfS Blueprint Report on PLM services 2016’. The 'Winner's Circle' of the HfS blueprint represents organizations that demonstrate excellence in both execution and innovation in PLM services. The report acknowledges Wipro’s compelling vision, strategy and commitment to deliver business outcome for PLM services.
Wipro has been positioned in the ‘Winner's Circle’ by HfS Research in its 2016 blueprint report on Digital Marketing Operations. HfS says Wipro is one of the early movers for intelligent automation, aspiring to use its HOLMES platform to apply intelligent automation to digital marketing automation.
Wipro is a Leader for the Third Consecutive Year in Gartner’s Magic Quadrant for Application Testing Services, Worldwide.* Gartner said Wipro is a good fit for large clients looking for a partner that can approach testing requirements with breadth and depth of practice and that can transform and manage large testing engagements.
Wipro was cited as a Leader in The Forrester WaveTM: B2C Mobile Services Providers, Q4 2016. The Forrester report has recognized Wipro for thousands of resources that it can bring to mobile B2C projects around the globe, including hundreds of designers and UX specialists and thousands of developers and testers and broad capabilities for related services - such as security - that it can tap into, which sets it apart from many of the smaller mobile-oriented shops.
Wipro has been rated as the leading player in the ‘Zinnov Zones 2016 Product Engineering Services report’ by Zinnov Management Consulting for the seventh consecutive year. This Zinnov study evaluated more than 35 global engineering service providers across the globe in 15 major industry segments. It analyzed responses from participants across key parameters like product development capabilities & innovation, client relationships, human capital, financials, ecosystem linkages, infrastructure, non-linear strategy and business sustainability.
Revenue for the quarter ended December 31, 2016 was 5.7 billion ($84 million1).
Please refer the table on page 8 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 8 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, 2016, 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 (08:45 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/wipro170125.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 .
* 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.
About Wipro Limited
Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) is a leading information technology, consulting and business process services company that delivers solutions to enable its clients do business better. Wipro delivers winning business outcomes through its deep industry experience and a 360-degree view of “Business through Technology.” By combining digital strategy, customer centric design, advanced analytics and product engineering approach, Wipro helps its clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services, strong commitment to sustainability and good corporate citizenship, Wipro has a dedicated workforce of over 170,000, serving clients across 6 continents. For more information, please visit www.wipro.com
Contact for Investor Relations
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Abhishek Kumar Jain
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Contact for Media & Press
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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, 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.
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