Wipro Records 18% YoY Revenue Growth in the Quarter Results for the Quarter Ended September 30, 2011 Under IFRS

BANGALORE, India and EAST BRUNSWICK, N.J., Oct. 31, 2011 /PRNewswire/ -- Wipro Limited (NYSE: WIT) today announced financial results under International Financial Reporting Standards (IFRS) for its second quarter ended September 30, 2011.

Highlights of the Results:

  • IT Services Revenue was $1,472 million, a sequential increase of 4.6% and YoY increase of 15.7%.
  • Non-GAAP constant currency revenue growth was 5.5% sequentially.
  • Total Revenues were Rs.90.94 billion ($1.85 billion(1)), an increase of 18% YoY.
  • Non-GAAP Adjusted Net Income was Rs.13.06 billion ($266 million(1)), an increase of 2% YoY. Net Income was Rs.13.01 billion ($265 million(1)), an increase of 1% YoY.
  • IT Services Revenues were Rs.68.29 billion ($1.39 billion(1)), an increase of 7% sequentially and 19% YoY.
  • IT Services Earnings Before Interest and Tax (EBIT) was Rs.13.64 billion ($278 million(1)), an increase of 7% YoY.
  • Our Operating Income to Revenue for IT Services was 20% for the quarter.

Performance for the quarter ended September 30, 2011.

Azim Premji, Chairman of Wipro, commenting on the results said – "Macroeconomic sentiments continue to remain uncertain. We have seen growth momentum build up in our IT Business with healthy volume growth. Our focused investment strategy will get the business to a higher growth trajectory. "

Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro, said – "We are continuing to see incremental progress in our client mining strategy with 5 customers contributing more than $100 million of revenues and our top customer hitting a revenue run rate upwards of $200 million. We had an impact on operating margins in the quarter due to salary increases."

T K Kurien, Executive Director & Chief Executive Officer, IT Business, said – "We have had a strong quarter with Revenues ahead of the upper end of the guided range. We continue to build differentiation and business value through our focus on key themes – Variabilization, Consumerization, Performance Analytics and Innovation in a world of constraints."

Outlook for the Quarter ending December 31, 2011

We expect Revenues from our IT Services business to be in the range of $1,500 million to $1,530 million*.

* Guidance is based on the following exchange rates: GBP/USD at 1.60, Euro/USD at 1.40, AUD/USD at 1.04, USD/INR at 46.42.

IT Services (75% of Total Revenue and 92% of Operating Income for the quarter ended September 30, 2011)

The IT Services segment had 131,730 employees as of September 30, 2011, an increase of 5,240 people this quarter. We added 44 new customers for the quarter.

In the current macro-economic environment, corporations across the globe are looking to maximize the potential of technology deployments and are increasingly relying on business models and technologies to variabilize their IT spends, enabling more differentiating investment for IT based Innovation.

Wipro is seeing traction with clients on cloud and variabilized business model offerings. State Street Corporation (NYSE: STT), one of the world's leading providers of financial services to institutional investors, has entered into a multi-year agreement with Wipro to provide application maintenance and support services  Wipro will deploy pioneering 'lean' methodologies delivered through its award winning CIGMA platform for this IT transformation engagement.

A leading European Communications Services Provider has expanded its existing relationship with Wipro to its wholesale business, wherein Wipro will provide variabilized technical support services for the service provider's customers in the United Kingdom.

Wipro has partnered with a Leading Convenience Retailer to provide Infrastructure Management Services. Wipro will provide easily scalable hosting and data center operations services to meet the client's aggressive growth plans by applying proven tenets of variabilization such as standardization and simplification to drive efficiency and optimize delivery.

Wipro won an order from UIDAI (Unique Identification Authority of India) for setting up computing and storage platform for 100 million Aadhaar numbers. Wipro also signed contracts with UIDAI for Data Center hosting services, specialized consulting and manpower services.

Awards and accolades

Wipro Technologies achieved Diamond Level Status, the highest ranking available, in Oracle Partner Network (OPN) Specialized program and has been recognized for expertise and co-development efforts across the Oracle Stack and continued commitment to joint customer success.

Wipro Technologies' Mobile-Trust Framework won the 3rd Annual 2011 Golden Bridge Awards for Mobile Security Solutions category.

IT Products (11% of Total Revenue and 3% of Operating Income for the quarter ended September 30, 2011)

  • Our IT Products segment recorded Revenue of Rs.10 billion ($204 million(1)) for the quarter ended September 30, 2011 a decline by 6% YoY.
  • EBIT was Rs.451 million ($9 million(1)) for the quarter, a decline of 15% YoY.
  • The ratio of our Operating Income to Revenue for this segment was 4.5% for the quarter.

Consumer Care and Lighting (9% of Total Revenue and 6% of Operating Income for the
quarter ended September 30, 2011)

  • Our Consumer Care and Lighting business segment recorded Revenue of Rs.8 billion ($163 million(1)) for the quarter ended September 30, 2011, representing an increase of 20% YoY.
  • EBIT was Rs.882 million ($18 million(1)) for the quarter, an increase of 6% YoY.  
  • Operating Income to Revenue for this segment was 11% for the quarter.

Wipro Limited

  • Total Revenue for the quarter ended September 30, 2011 was Rs.90.94 billion ($1.85 billion(1)) representing an increase of 18% over the same period last year.
  • Net Income for the quarter ended September 30, 2011 was Rs.13.01 billion ($265 million(1)) representing an increase of 1% over the same period last year.
  • Non-GAAP Adjusted Net Income (excluding impact of accelerated amortization of stock based compensation) for the quarter ended September 30, 2011 was Rs.13.06 billion ($266 million(1)) representing an increase of 2% over the same period last year.

Please see the table on page 7 for a reconciliation between (i) IFRS Net Income and non-GAAP Adjusted Net Income (excluding the impact of stock-based compensation) and (ii) 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 Adjusted Net Income for the period, which is a non-GAAP measure that excludes the impact of accelerated amortization in respect of stock options that vest in a graded manner, and IT Services Revenue on a constant currency basis, which is a non-GAAP 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 consider a stock option award with a graded vesting schedule to be in substance a single award not multiple stock option awards and accordingly believe the straight line amortization reflects the economic substance of the award. 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. We believe that the presentation of this Non-GAAP Adjusted Net Income, when shown in conjunction with the corresponding IFRS measure, provides useful information to investors and management regarding financial and business trends relating to its Net Income for the period

These Non-GAAP financial measures are 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 these non-GAAP measures, 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.

For internal budgeting process, our management also uses financial statements that exclude the impact of accelerated amortization relating to stock options that vest in a graded manner. Management of the Company also uses Non-GAAP Adjusted Net Income, in addition to the corresponding IFRS measure, in reviewing our financial results.

Results for the year ended September 30, 2011, computed under IFRS, along with individual business segment reports, are available in the Investors section of our website at www.wipro.com.

Quarterly Conference Calls

We will hold a conference call today at 02:00 p.m. Indian Standard Time (04:30 a.m. US Eastern Time) and at 6:45 p.m. Indian Standard Time (9:15 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.

About Wipro Limited (NYSE: WIT)

Wipro provides comprehensive IT solutions and services, including systems integration, Information Systems outsourcing, IT enabled services, package implementation, software application development and maintenance, and research and development services to corporations globally.   Wipro Limited is the first PCMM Level 5 and SEI CMM Level 5 certified IT Services Company globally. Wipro also has a strong presence in niche market segments of Infrastructure Engineering and Consumer Products & Lighting.  

For more information, please visit our websites at www.wipro.com.

Forward-looking and Cautionary 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, 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 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 September 30, 2011, for cable transfers in Indian rupees, as certified by the Federal Reserve Board of New York, which was US $1= Rs.49.05. However, the realized exchange rate in our IT Services business segment for the quarter ended September 30, 2011 was US$1= Rs.46.38


WIPRO LIMITED AND SUBSIDIARIES

AUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

(Rupees in millions, except share and per share data, unless otherwise stated)










As of March 31,


As of September 30,



2011


2011


2011







Convenience translation into







US$ in millions







(Unaudited)

ASSETS







Goodwill


54,818


65,336


1,332

Intangible assets


3,551


4,341


88

Property, plant and equipment


55,094


58,387


1,190

Investment properties


-


-


-

Investment in equity accounted investee


2,993


3,155


64

Other Investments


(0)


(0)


(0)

Derivative assets


2,984


4,715


96

Non-current tax assets


9,239


9,239


188

Deferred tax assets


1,467


2,457


50

Other non-current assets


8,983


10,242


209

Total non-current assets


139,129


157,872


3,219








Inventories


9,707


10,450


213

Trade receivables


61,627


80,495


1,641

Other current assets


19,744


27,211


555

Derivative assets


-




-

Unbilled revenues


24,149


28,079


572

Available for sale investments


49,282


40,563


827

Derivative asset


-


-


-

Current tax assets


4,955


6,409


131

Derivative assets


1,709


2,272


46

Cash and cash equivalents


61,141


50,132


1,022

Total current assets


232,314


245,611


5,007







-

TOTAL ASSETS


371,443


403,483


8,226








EQUITY







Share capital


4,908


4,915


100

Share premium


30,124


30,099


614

Retained earnings


203,250


218,290


4,450

Share based payment  reserve


1,360


1,836


37

Other components of equity


580


2,306


47

Shares held by controlled trust


(542)


(542)


(11)

Equity attributable to the equity holders of the company


239,680


256,904


5,238

Non-controlling Interest


691


640


13

Total equity


240,371


257,544


5,251








LIABILITIES







Long - term loans and borrowings


19,759


23,028


469

Deferred tax liabilities


301


360


7

Employee benefit obligations


-


-


-

Derivative liabilities


2,586


2,633


54

Non-current tax liability


5,021


4,936


101

Other non-current liabilities


2,706


3,480


71

Provisions


81


94


2

Total non-current liabilities


30,454


34,531


704








Loans and borrowings and bank overdrafts


33,043


33,804


689

Trade payables and accrued expenses


44,052


49,738


1,014

Unearned revenues


6,595


7,533


154

Current tax liabilities


7,340


7,770


158

Derivative liabilities


1,358


4,189


85

Other current liabilities


5,906


6,402


131

Provisions


2,324


1,972


40

Total current liabilities


100,618


111,408


2,271








TOTAL LIABILITIES


131,072


145,939


2,975

TOTAL EQUITY AND LIABILITIES


371,443


403,483


8,226












WIPRO LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME

(Rs. in millions, except share and per share data, unless otherwise stated)















Three months ended September 30,



Six months ended September 30,


2010


2011


2011



2010


2011


2011






Convenience translation into US $ in millions (Unaudited)







Convenience translation into US $ in millions (Unaudited)






































Gross revenues

77,719


90,070


1,836



149,625


175,000


3,568














Cost of revenues

(53,270)


(64,979)


(1,325)



(101,917)


(125,000)


(2,548)














Gross profit

24,449


25,091


512



47,708


50,000


1,019








































Selling and marketing expenses

(5,751)


(6,510)


(133)



(11,137)


(12,794)


(261)

General and administrative expenses

(4,251)


(4,578)


(93)



(8,090)


(8,961)


(183)

Foreign exchange gains/(losses), net

(414)


875


18



45


1,586


32














Results from operating activities

14,033


14,878


303



28,526


29,831


608














Finance expenses

(467)


(1,250)


(25)



(870)


(2,010)


(41)

Finance and other income

1,422


2,113


43



2,773


4,305


88

Finance income/(expenses), net

439


440


9



836


1,221


25

Other income / (expenses), net

517


423


9



1,067


1,074


22

Share of profits of equity accounted investee

192


99


2



349


208


4














Profit before tax

15,180


15,840


323



30,778


32,334


659











-



Income tax expense

(2,183)


(2,841)


(58)



(4,528)


(5,937)


(121)














Profit for the period

12,997


12,999


265



26,250


26,397


538














Attributable to:













Equity holders of the company

12,849


13,009


265



26,035


26,358


537

Non-controlling interest

148


(10)


(0)



215


39


1














Profit for the period

12,997


12,999


265



26,250


26,397


538














Earnings per equity share:













Basic

5.28


5.33


0.11



10.69


10.80


0.22

Diluted

5.25


5.30


0.11



10.66


10.74


0.22



























Weighted average number of equity shares used in computing earnings per equity share


























Basic

2,435,417,820


2,441,538,183


2,441,538,183



2,434,528,098


2,440,770,037


2,440,770,037

Diluted

2,445,703,913


2,452,203,157


2,452,203,157



2,442,200,976


2,454,030,952


2,454,030,952








































Additional Information













Segment Revenue













IT Services

57,471


68,294


1,392



112,473


132,341


2,698

IT Products

10,693


10,008


204



19,013


20,066


409

IT Services & Products

68,164


78,302


1,596



131,486


152,407


3,107

Consumer Care and Lighting

6,651


8,002


163



13,064


15,547


317

Others

2,490


4,641


95



5,120


8,632


176

Total

77,305


90,945


1,854



149,670


176,586


3,600














Operating Income













IT Services

12,746


13,640


278



26,318


27,708


565

IT Products

533


451


9



869


874


18

IT Services & Products

13,279


14,091


287



27,187


28,582


583

Consumer Care and Lighting

832


882


18



1,725


1,777


36

Others

(78)


(95)


(2)



(387)


(528)


(11)

Total

14,033


14,878


303



28,526


29,831


608














Reconciliation  of adjusted Non-GAAP profit to profit as per IFRS

























Profit for the period attributable to Equity holders of the Company

12,849


13,009


265



26,035


26,358


537














Adjustments :













Accelerated amortization of stock options that vest in a graded manner

(88)


49


1



(211)


(124)


(3)














Non-GAAP adjusted profit

12,761


13,058


266



25,823


26,234


535














Reconciliation  of Non-GAAP Constant Currency IT Services Revenue to IT Services Revenue as per IFRS ($MN)






















IT Services Revenue as per IFRS

1,472












Effect of Foreign currency exchange movement

(13)












Non-GAAP Constant Currency IT Services Revenue based on previous quarter exchange rates

1,485

























IT Services Revenue as per IFRS

1,472












Effect of Foreign currency exchange movement

27












Non-GAAP Constant Currency IT Services Revenue based on previous year exchange rates

1,445















SOURCE Wipro Limited



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