Wipro Q1FY21 consolidated net up 0.1% YoY at Rs 2,390.4 cr, revenue up 1.3%

On a sequential basis, revenue declined 5 per cent.

IT major Wipro on Tuesday posted a 0.11 per cent year-on-year (YoY) rise in its consolidated net profit at Rs 2,390.4 crore for the quarter ended June 2020 (Q1FY21). The company had reported a profit of Rs 2,387.6 crore in the year-ago period. Sequentially, the numbers grew 2.76 per cent. It was the first result announcement by the company under its new CEO, Thierry Delaporte, who took charge of the firm earlier this month.

Revenue for the period came in at Rs 14,913.1 crore, up 1.33 per cent against Rs 14,716.1 crore in the year-ago period. On a sequential basis, numbers declined 5 per cent.

Wipro's IT Services segment revenue stood at $1,921.6 million, down 5.7 per cent YoY while in constant currency (CC) terms, the segment's revenue decreased by 4.4 per cent YoY. IT Services operating margin for the quarter stood at 19 per cent, an expansion of 0.6 per cent YoY while operating cash flows was at Rs 41.8 billion ($553.6 million), which is 174.9 per cent of net income, the company said in its press release.

Earnings per share (EPS) for the quarter was at Rs 4.20, up 5.7 per cent YoY. 

Operating metrics pertaining to IT Services segment

“I am deeply honored to lead Wipro, an extraordinary company and an exemplary corporate citizen with a deep technology heritage built on a strong foundation of values. I have great respect for the work done by the Azim Premji Foundation, its 67% economic ownership of Wipro adds greater meaning to what we do. Profitable growth will be the most important priority on my agenda. I am confident that we will be able to deliver longterm, sustainable growth in the interest of all our stakeholders," said Thierry Delaporte, CEO and Managing Director.

Most analysts had estimated a weak set of numbers for the IT firm given the economic disruptions caused by Covid-19-triggered nationwide lockdown.

Analysts at Edelweiss Securities, for instance, had expected revenues in US dollar terms to decline 5.9 per cent QoQ and 4.3 per cent YoY at $1,950 million. In rupee terms, revenue was seen at Rs 14,896.9 crore, down 5.2 per cent QoQ and 1.2 per cent YoY. READ EXPECTATIONS HERE

Earnings before interest, tax, depreciation, and amortisation (EBITDA) was estimated to fall 10 per cent YoY at Rs 2,772.8 crore. On YoY basis, the numbers were expected to decline 3.6 per cent. EBITDA margin was seen at 18.6 per cent against 19.6 per cent logged in the previous quarter as well as in the year-ago period. Net profit or profit after tax (PAT) was pegged at Rs 2,133.2 crore, down 8.3 per cent QoQ and 10.6 per cent YoY.

Forward-looking statement

In its forward-looking statement, Wipro said the conditions caused by the Covid-19 pandemic could decrease technology spending, adversely affect demand for its products, affect the rate of customer spending and could adversely affect its customers’ ability or willingness to purchase its offerings, and delay prospective customers’ purchasing decisions. The pandemic may also "adversely impact our ability to provide on-site consulting services and our inability to deliver our customers or delay the provisioning of our offerings, all of which could adversely affect our future sales, operating results and overall financial performance. Our operations may also be negatively affected by a range of external factors related to the Covid-19 pandemic that are not within our control," the company said. 

Meanwhile, in the presser post the result announcement, Wipro CEO Thierry Delaporte said "it's a defining period for Wipro and the industry and the management has been spending time to take holistic view of the business."

Jatin Dalal, Chief Financial Officer said, “We expanded the margins during the quarter, despite lower revenues, on the back of solid execution of several operational improvements and rupee depreciation. We also continued to sustain robust cash generation with operating cash flows at 174.9 per cent of net income.” 

The CFO further said he was happy with the overall performance of the company. "We have done well with 90 per cent of staff working from Home," Dalal added. 

Wipro to acquire Brazil-based lVlA Servigos de lnform6tica Ltda

In a separate filing, the company informed that it has signed an agreement to acquire Brazil-based lVlA Servigos de lnform6tica Ltda.

"lVlA is headquartered in the Northeast of Brazil, with offices in Fortaleza-Cear6, RecifePernambuco and Natal-Rio Grande do Norte. Founded in 1996, lVlA provides lT solutions including system development, maintenance, consulting and project management services to clients in different sectors such as Financial Services, Transportation, Retail, Healthcare, Consumer Goods and Manufacturing in Brazil," Wipro said in its press release.