Wipro Q4 net profit slips 6% to Rs 2,345 cr; key highlights of results

New Delhi: Bengaluru-based IT major Wipro Ltd on Wednesday (April 15) posted nearly 6 per cent decline in consolidated net profit to Rs 2,345.2 crore for January-March 2020 quarter, according to its regulatory filing with the BSE. The company also suspended revenue growth guidance due to uncertainty in the external environment amid coronavirus pandemic.

The company said, "We estimate that the IT services revenues for the quarter ended March 31, 2020, were negatively impacted by COVID-19 by approximately USD 14-16 million (0.7-0.8 per cent of revenues)," adding "Due to the uncertainty around the course of the COVID-19 pandemic, it does not have visibility into the extent to which it will disrupt the company's operations."

On the company's performance for the quarter and year ended March 31, 2020, Abidali Z Neemuchwala, CEO and Managing Director, said, “In these unprecedented times, I am extremely proud of how the Wipro team has come together and worked 24/7 to ensure the safety and well-being of each other while continuing to serve our clients. We hope that all of us stay safe and strong during these tough times. We are confident that our broad portfolio of services and our ability to execute to our commitments makes us well-positioned to gain market share.”

Highlights of the Results

Results for the Year ended March 31, 2020:

1. Gross Revenue was Rs 610.2 billion ($8.1 billion), an increase of 4.2% YoY
2. IT Services Segment Revenue was at $8,256.2 million, grew at 1.7% YoY
3. Non-GAAP constant currency IT Services Segment Revenue increased by 3.9% YoY
4. IT Services Operating Margin4 for the year was at 18.1%, an expansion of 0.2% YoY
5. Net Income for the year was Rs 97.2 billion ($1.3 billion), an increase of 8.0% YoY
6. EPS for the year was Rs 16.67 ($0.221) per share and grew 11.2% YoY

Results for the Quarter ended March 31, 2020:

1. Gross Revenue was Rs 157.1 billion ($2.1 billion), an increase of 4.7% YoY
2. IT Services Segment Revenue was at $2,073.7 million, a decrease of 1.0% QoQ
3. Non-GAAP3 constant currency IT Services Segment Revenue increased by 0.4%QoQ
4. IT Services Operating Margin for the quarter was at 17.6%, a decrease of 0.8% QoQ
5. Net Income for the quarter was Rs 23.3 billion ($308.5 million), a decrease of 6.3% YoY
6. EPS for the quarter was Rs 4.09 ($0.051) per share, a decrease of 1.1% YoY
7. The Board has not recommended any final dividend. The interim dividend of Rs 1 declared by the board at its meeting held on January 14, 2020 shall be considered as the final dividend for the financial year 2019-20. Thus, the total dividend for the financial year 2019-20 remains Rs 1 per equity share. 

Jatin Dalal, Chief Financial Officer said, “The quarters ahead seem challenging and require a tremendous response on costs. We also anticipate our working capital to increase, but our strong balance sheet provides us the confidence that we will emerge stronger and better. Further, due to the volatility in the external environment, we have decided not to provide quarterly guidance on revenues.” 

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 75.39, as published by the Federal Reserve Board of Governors on March 31, 2020. However, the realized exchange rate in our IT Services business segment for the quarter ended March 31, 2020 was US$1= Rs 73.95.

2. YoY growth rates for the year ended March 31, 2020 have been computed by adjusting revenues for the year ended March 31,
2019 for the impact of divestments.

3. Constant currency revenue for a period is the product of volumes in that period times the average actual exchange rate of the corresponding comparative period.

4. IT Services Operating Margin refers to Segment Results Total as reflected in IFRS financials.

5. The estimated impact of COVID-19 on our business is due to service discontinuity caused by the inability of our employees to work from home or contract cancellations/ ramp down attributed to the COVID-19 pandemic. 

"We estimate that the IT Services Revenues for the quarter ended March 31, 2020, were negatively impacted by COVID-19 by approximately $14 -$16 million (0.7%-0.8% of revenues). Due to the uncertainty around the course of the COVID-19 pandemic, we do not have visibility into the extent to which it will disrupt our operations, and we have decided to not provide revenue guidance for the quarter ending June 30, 2020. We anticipate that we will resume providing revenue guidance when we have increased certainty of both demand and supply-side factors," the Chief Financial Officer is quoted as saying in the regulatory filing.