Updating With Tabular Information -- Wipro Records 19% YoY Growth in Profit After Tax IT Services Business Crosses The 100,000 Employee Mark

Results for the quarter ended December 31, 2009 under IFRS

Jan 19, 2010, 23:54 ET from Wipro Limited

BANGALORE, India and EAST BRUNSWICK, N.J., Jan. 19 /PRNewswire-FirstCall/ --  Wipro Limited (NYSE: WIT) today announced financial results under IFRS for its third fiscal quarter ended December 31, 2009.

Highlights of the Results:

  • IT Services Revenue in dollar terms was $1,126.8 million, a growth of 5.8% sequentially and 2.4% YoY.
  • IT Services Revenue on a constant currency basis was $1,117.1 million, a sequential growth of 4.9%. On a constant currency basis, YoY decline was 0.8%.
  • Total Revenues were Rs. 69.77 billion ($1.50 billion(1)), representing an increase of 6% over the same period last year.
  • Net Income was Rs. 12.03 billion ($259 million(1)), representing an increase of 19% over the same period last year.
  • Non-GAAP Adjusted Net Income (excluding impact of accelerated amortization of stock based compensation) was Rs. 12.06 billion ($260 million(1)), representing an increase of 19% over the same period last year.
  • IT Services Revenues were Rs. 51.65 billion ($1,113 million(1)), representing an increase of 2% over the same period last year.
  • IT Services Earnings Before Interest and Tax (EBIT) was Rs. 12.18 billion ($263 million(1)), representing an increase of 17% over the same period last year.
  • IT Services added 31 new clients in the quarter.
  • IT Products Revenue grew 22% over the same period last year and EBIT grew by 50%.
  • IT Services business had a net addition of 4,855 employees.
  • Consumer Care and Lighting Revenue grew 18% over the same period last year, and EBIT grew 20%.

Performance for the Quarter ended December 31, 2009 and Outlook for our Quarter ending March 31, 2010

Azim Premji Chairman of Wipro, commenting on the results said –

"We have seen a positive demand environment which has driven broad based sequential growth across all our verticals, service lines and geographies. In 2010, we expect IT budgets to be flat to marginally positive.  For the quarter ending March 31, 2010, we expect revenues from our IT Services business to be in the range of $1,161 million to $ 1,183 million.*"

Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro, said –

"We reported another strong quarter driven by significant uptick in volumes.  We have maintained margins despite a decrease in our rate realization and a strong appreciation of the rupee.  Our Order Booking has been good and BFSI has bounced back strongly."

* Guidance is based on the following constant currency exchange rates: GBP/USD at 1.63, Euro/USD at 1.46, AUD/USD at 0.91, USD/INR at 46.64

Wipro Limited

Total Revenue for our quarter ended December 31, 2009 was Rs. 69.77 billion ($1.50 billion(1)), representing an increase of 6% over the same period last year. Net Income for our quarter ended December 31, 2009 was Rs.12.03 billion ($259 million(1)), representing an increase of 19% over the same period last year. Net Income for our quarter ended December 31, 2009 on an Adjusted Non-GAAP basis (excluding impact of accelerated amortization of stock based compensation) was Rs. 12.06 billion ($260 million(1)), representing an increase of 19% over the same period last year.  Earnings per Share for our quarter ended December 31, 2009 were Rs 8.25 ($0.18(1)), representing an increase of 19% over the same period last year. Non-GAAP Adjusted Net Income (excluding the impact of accelerated amortization of stock based compensation) per Share for our quarter ended December 31, 2009 were Rs. 8.27 ($0.181), representing an increase of 19% over the same period last year.

Reconciliation between IFRS net income and Non-GAAP adjusted net income (excluding impact of accelerated stock based compensation) is provided in the table on page 8.

IT Services (74% of Total Revenue and 90% of Operating Income for our quarter ended December 31, 2009)

Our IT Services business segment recorded Revenue of Rs. 51.65 billion(2) ($1,113 million(1)) for our quarter ended December 31, 2009, representing an increase of 2% over the same period last year. EBIT for this segment was Rs. 12.18 billion ($263 million(1)) for our quarter ended December 31, 2009, representing an increase of 17% over the same period last year.  

Our Operating Income to Revenue for this segment was 23.6% for our quarter ended December 31, 2009.

We had 102,746 employees as of December 31, 2009, an increase of 4,855 people.

Wipro's ability to offer integrated Service lines and be a transformational partner to our clients helped us secure several large deals this quarter. Our focus in driving consulting led engagements to solve business challenges is being recognized by our customers.

A large Europe-based global steel manufacturer is leveraging Wipro's business transformation expertise to engage in business driven initiatives during a period of strategic restructuring. This multi-year strategic program for the customer would help it achieve significant business and operational benefits. 

Wipro entered into a multi-year outsourcing engagement with a leading Global tobacco group, to help the customer improve the effectiveness and efficiency of application support services for its global business operations.

Our India & Middle East business registered some strong wins during the quarter. Wipro Arabia won a very large order from an upcoming university in Saudi Arabia for end-to-end set up of their IT and Telecom infrastructure. Wins in the infrastructure segment also include turnkey implementation of State Data Center projects for Gujarat and Maharashtra, end-to-end implementation of a Data Center for Shipping Corporation of India (SCI), and upgrade and enhancement of the Primary Data Center and Disaster Recovery Infrastructure for Oriental Bank of Commerce.  Another prestigious win in the government sector was a turnkey project for implementation of FINnet (Financial intelligence network) for tracking money laundering, financing of unlawful activities and other economic crimes occurring within the country for Financial Intelligence Unit, Ministry of Finance, India.

Awards and Recognition

Wipro's commitment to mitigating the effects of climate change and furthering the Green IT agenda was recognized by Asia Case Research Center (ACRC), a premier portal for teaching case studies that has written a case study on Wipro's Green IT initiatives. ACRC is the nodal agency for all research cases and this case study will get syndicated across premier universities globally.

Wipro was recognized as a winner of the 2009 Global MAKE (Most Admired Knowledge Enterprises) Award for 'developing knowledge workers through senior management leadership' and 'creating an environment for collaborative knowledge sharing'.  This is the third time that Wipro has been recognized as a Global MAKE winner.

Wipro's website, www.wipro.com was awarded the 5th Annual Davey Award, for outstanding work in digital design by The International Academy of Visual Arts.

Wipro won the Outsourcing Institute and Vantage Partners' RMMY award for Best Performance Management Process. Wipro has been recognized by this award for the second consecutive year in a row.

The Wipro Brand continued to set high benchmarks in the industry. Wipro was ranked 8th in the India's most valuable Brand (2009) study carried out by Brand Finance, a global Brand Valuation firm for Economic Times.

Expanding our global footprint

In line with our globalization strategy, we announced the inauguration of our global delivery centre at Chengdu, China to provide IT & BPO services to our customers. This new center, in addition to our Shanghai center, will increase Wipro's service capabilities in the region.  

  We also announced the expansion of our Atlanta development center. The center will continue to focus on delivering world-class services and creating new job opportunities in the local community.

IT Products (14% of Total Revenue and 4% of Operating Income for our quarter ended December 31, 2009)

Our IT Products business segment recorded Revenue of Rs. 10.11 billion ($218 million(1)) for our quarter ended December 31, 2009, recording growth of 22% over the same period last year. EBIT for this segment was Rs. 603 million ($12.99 million(1)) for our quarter ended December 31, 2009.

Our Operating Income to Revenue for this segment was 6.0% for our quarter ended December 31, 2009.

Return on Capital Employed (ROCE) for our IT Services and Products segment was 46% for our quarter ended December 31, 2009, compared to 46% for the same period last year.

Consumer Care and Lighting (8% of Total Revenue and 6% of Operating Income for our quarter ended December 31, 2009)

Our Consumer Care and Lighting business segment recorded Revenue of Rs. 5.74 billion ($124 million(1)) for our quarter ended December 31, 2009, representing an increase of 18% over the same period last year.  EBIT for this segment was Rs. 747 million ($16.11 million(1)) for our quarter ended December 31, 2009, representing an increase of 20% over the same period last year.

Our Operating Income to Revenue for this segment was 13.0% for our quarter ended December 31, 2009. ROCE for this segment was 16% for our quarter ended December 31, 2009, compared to 13% for the same period last year.

During the quarter, Wipro completed its acquisition of the Yardley business in Asia, Middle East, Australasia and certain African markets from the UK-based Lornamead Group. The revenues of Yardley have been consolidated with Wipro from December 9, 2009.

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 our 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.

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 this non-GAAP financial measure with the most directly comparable IFRS financial measure should be carefully evaluated.

The Company believes 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. The Company considers a stock option award with the graded vesting schedule to be in substance a single award not multiple stock option awards. Further, the Company considers the services of the employee in each year covered by the stock option award to be equally valuable and accordingly believes that the straight line amortization reflects the economic substance of the stock awards. However, the Company records the related stock compensation expenses on an accelerated amortization basis for IFRS reporting. Therefore, we believe that making available an adjusted net income number that excludes the impact of accelerated amortization from net income provides useful supplemental information to both management and investors about our financial and business trends.

For our 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. The management of the Company also uses Non-GAAP Adjusted Net Income, in addition to the corresponding IFRS measure, in reviewing our financial results.

A material limitation associated with the use of Non-GAAP Adjusted Net Income as compared to the IFRS measure of net income is that it does not include costs which are recurring in nature and may not be comparable with the calculation of net income for other companies in our industry. The Company compensates for these limitations by providing full disclosure of the effects of this non-GAAP measure, by presenting the corresponding IFRS financial measure and by providing a reconciliation to the corresponding IFRS measure.

Our results for the quarter ended December 31, 2009, computed under Indian GAAP and IFRS, along with our individual business segment reports, are available in the Investors section of our website at www.wipro.com.

Quarterly Conference Calls

We will hold conference calls today at 02:00 p.m. Indian Standard Time (03:30 a.m. US Eastern Time) and at 6:30 p.m. Indian Standard Time (8:00 a.m. US Eastern Time) to discuss our performance for the quarter and answer questions sent to email ID: sridhar.ramasubbu@wipro.com. 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 provides comprehensive IT solutions and services, including systems integration, information systems outsourcing, 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's IT Services business was assessed at Level 5 for CMMI V 1.2 across Offshore and Onsite development centers.

Wipro also has a strong presence in niche market segments of Infrastructure Engineering, and Consumer Products & Lighting.  

Wipro's ADS are listed on the New York Stock Exchange, and our equity shares are listed in India on the Stock Exchange - Mumbai, and the National Stock Exchange.  For more information, please visit our websites at www.wipro.com, www.wiprocorporate.com and www.wipro.in

Forward-looking and Cautionary Statements

In addition to historical information, this press release contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 December 31, 2009, for cable transfers in Indian rupees, as certified by the Federal Reserve Board of New York, which was US $1=Rs.46.40. However, the realized exchange rate in our IT Services business segment for the quarter ended December 31, 2009 was US$1=Rs.45.84

2.  IT Services business segment Revenue was Rs. 51.64 billion for the quarter ended December 31, 2009 under the Indian GAAP. The difference of Rs.12 million ($0.26 million(1)) is primarily attributable to differences in accounting standards under Indian GAAP and IFRS.




                        WIPRO LIMITED AND SUBSIDIARIES
    UNAUDITED 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   December 31,
                                               2009        2009       2009
                                             ---------  --------- ------------
                                                                  Convenience
                                                                  translation
                                                                   into US $
                                                                  in millions
                                             ---------  --------- ------------
    ASSETS
    Goodwill                                  56,143      54,254      1,169 
    Intangible assets                          3,493       4,152         89 
    Property, plant and equipment             49,794      53,074      1,144 
    Investment in equity accounted investees   1,670       1,991         43 
    Other non-current assets                  10,675       9,021        194 
    Total non-current assets                 121,775     122,492      2,640 

    Inventories                                7,587       7,880        170 
    Trade receivables                         48,652      50,035      1,078 
    Other current assets                      15,083      18,334        395 
    Derivative assets                          1,162       2,559         55 
    Unbilled revenues                         14,108      16,385        353 
    Available for sale investments            16,543      39,855        859 
    Current tax assets                         9,826      11,883        256 
    Cash and cash equivalents                 49,117      42,563        917 
    Total current assets                     162,078     189,494      4,084 

    TOTAL ASSETS                             283,853     311,986      6,724 

    EQUITY
    Share capital                              2,930       2,935         63 
    Share premium                             27,280      28,810        621 
    Retained earnings                        126,646     153,664      3,312 
    Share based payment  reserve               3,745       3,178         68 
    Other components of equity               (12,915)     (6,623)      (143)
    Shares held by control trust                (542)       (542)       (12)
    Equity attributable to the equity
     holders of the company                  147,144     181,422      3,910 
    Minority Interest                            237         393          8 
    Total equity                             147,381     181,815      3,918 

    LIABILITIES
    Long - term loans and borrowings          19,681      19,079        411 
    Employee benefit obligations               3,111       2,907         63 
    Other non-current liabilities              1,668         757         16 
    Total non-current liabilities             24,460      22,743        490 

    Loans and borrowings and bank overdrafts  37,211      35,849        773 
    Trade payables and accrued expenses       41,650      44,548        960 
    Unearned revenues                          8,453       8,423        182 
    Current tax liabilities                    6,492       7,666        165 
    Derivative liabilities                    12,022       5,047        109 
    Other current liabilities                  6,184       5,895        127 
    Total current liabilities                112,012     107,428      2,315 

    TOTAL LIABILITIES                        136,472     130,171      2,805 
    TOTAL EQUITY AND LIABILITIES             283,853     311,986      6,724 




                         WIPRO LIMITED AND SUBSIDIARIES
         UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME
            (Rupees in millions, except share and per share data,
                            unless otherwise stated)

                                          Three months ended December 31,
                                     ---------------------------------------
                                        2008           2009         2009
                                     ---------      ---------   ------------
                                                                Convenience
                                                                translation
                                                                 into US $
                                                                in millions
                                     ---------      ---------   ------------



    Gross revenues                     65,898         69,380          1,495

    Cost of revenues                  (46,409)       (47,766)        (1,029)

    Gross profit                       19,489         21,614            466

    Selling and marketing expenses     (4,364)        (4,817)          (104)
    General and administrative
     expenses                          (4,191)        (3,655)           (79)
    Foreign exchange gains/(losses),
     net                                  186            394              8

    Results from operating activities  11,120         13,536            292

    Finance and other income /
     (expenses), net                      452            721             16
    Share of profits of equity
     accounted associates                 114            128              3

    Profit before tax                  11,686         14,385            310

    Income tax expense                 (1,572)        (2,321)           (50)

    Profit for the period              10,114         12,063            260

    Attributable to:
    Equity holders of the company      10,098         12,032            259
    Minority interest                      16             31              1

    Profit for the period              10,114         12,063            260

    Earnings per equity share:
    Basic                                6.94           8.25           0.18
    Diluted                              6.91           8.19           0.18


    Weighted average number of
     equity shares used in
     computing EPS earnings per
     equity share
    Basic                       1,454,578,545  1,457,758,937  1,457,758,937
    Diluted                     1,461,046,302  1,469,303,689  1,469,303,689



    Additional Information
    Segment Revenue
    IT Services                        50,787         51,648          1,113
    IT Products                         8,269         10,114            218
    IT Services & Products             59,056         61,762          1,331
    Consumer Care and Lighting          4,864          5,743            124
    Others                              2,164          2,269             49
    Total                              66,084         69,774          1,504

    Operating Income
    IT Services                        10,422         12,182            263
    IT Products                           401            603             13
    IT Services & Products             10,823         12,784            276
    Consumer Care and Lighting            621            747             16
    Others                               (324)             5              0
    Total                              11,120         13,536            292

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

    Profit for the period as per IFRS  10,098         12,032            259

    Adjustments :
    Accelerated amortization of
     stock options that vest in
     a graded manner                     (14)             28              1

     Non-GAAP adjusted profit          10,084         12,060            260



                                          Nine months ended December 31,
                                     ---------------------------------------
                                        2008           2009         2009
                                     ---------      ---------   ------------
                                                                Convenience
                                                                translation
                                                                 into US $
                                                                in millions
                                     ---------      ---------   ------------


    Gross revenues                    191,616        202,185          4,357

    Cost of revenues                 (134,850)      (138,534)        (2,986)

    Gross profit                       56,766         63,651          1,372

    Selling and marketing expenses    (12,996)       (13,547)          (292)
    General and administrative
     expenses                         (10,933)       (11,183)          (241)
    Foreign exchange gains/(losses),
     net                                 (792)          (772)           (17)

    Results from operating activities  32,045         38,149            822

    Finance and other income /
     (expenses), net                    1,001          1,757             38
    Share of profits of equity
     accounted associates                 327            354              8

    Profit before tax                  33,373         40,260            868

    Income tax expense                 (4,574)        (6,279)          (135)

    Profit for the period              28,799         33,981            732

    Attributable to:
    Equity holders of the company      28,749         33,842            729
    Minority interest                      50            139              3

    Profit for the period              28,799         33,981            732

    Earnings per equity share:
    Basic                               19.78          23.23           0.50
    Diluted                             19.66          23.04           0.50


    Weighted average number of
     equity shares used in
     computing EPS earnings per
     equity share
    Basic                       1,453,654,904  1,456,931,312  1,456,931,312
    Diluted                     1,462,331,122  1,469,028,352  1,469,028,352



    Additional Information
    Segment Revenue
    IT Services                       142,306        149,894          3,230
    IT Products                        25,516         29,305            632
    IT Services & Products            167,822        179,199          3,862
    Consumer Care and Lighting         14,447         16,500            356
    Others                              8,555          5,714            123
    Total                             190,824        201,413          4,341

    Operating Income
    IT Services                        29,527         34,691            748
    IT Products                         1,071          1,504             32
    IT Services & Products             30,598         36,195            780
    Consumer Care and Lighting          1,896          2,272             49
    Others                               (449)          (318)            (7)
    Total                              32,045         38,149            822

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

    Profit for the period as per IFRS  28,749         33,842            729

    Adjustments :
    Accelerated amortization of
     stock options that vest in
     a graded manner                      175           (101)            (2)

     Non-GAAP adjusted profit          28,924         33,741            727

SOURCE Wipro Limited



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