Operating cash flows at 132.3% of net income.
FinTech BizNews Service
Mumbai, 17 October, 2024: Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO), a leading technology services and consulting company, announced financial results under International Financial Reporting Standards (IFRS) for the quarter ended September 30, 2024.
Highlights of the Results for the Quarter ended September 30, 2024:
1. Gross revenue was at Rs223.0 billion ($2,662.6 million1 ), an increase of 1.5% QoQ and decrease of 1.0% YoY.
2. IT services segment revenue was at $2,660.1 million, an increase of 1.3% QoQ and decrease of 2.0% YoY.
3. Non-GAAP2 constant currency IT Services segment revenue increased 0.6% QoQ and decreased 2.3% YoY.
4. Total bookings3 was at $3,561 million. Large deal bookings4 was at $1,489 million, an increase of 28.8% QoQ and 16.8% YoY in constant currency2 .
5. IT services operating margin5 for the quarter was at 16.8%, an increase of 0.3% QoQ and 0.7% YoY.
6. Net income for the quarter was at Rs32.1 billion ($383.1 million1 ), an increase of 6.8% QoQ and 21.3% YoY.
7. Earnings per share for the quarter was at Rs6.14 ($0.071 ), an increase of 6.8% QoQ and 21.3% YoY.
8. Operating cash flows of Rs42.7 billion ($509.7 million1 ), an increase of 10.5% YoY and at 132.3% of Net Income for the quarter.
9. Voluntary attrition6 was at 14.5% on a trailing 12-month basis.
10. Wipro’s Board of Directors recommended issue of bonus shares to shareholders (including stock dividend to ADS holders) in the ratio of 1:1 (1 equity share for every 1 equity share held), subject to approval of shareholders.
Outlook for the Quarter ending December 31, 2024
We expect revenue from our IT Services business segment to be in the range of $2,607 million to $2,660 million. This translates to sequential guidance of (-) 2.0% to 0.0% in constant currency terms. Outlook for the Quarter ending December 31, 2024, is based on the following exchange rates: GBP/USD at 1.32, Euro/USD at 1.10, AUD/USD at 0.68, USD/INR at 83.65 and CAD/USD at 0.74
Performance for the Quarter ended September 30, 2024
Srini Pallia, CEO and Managing Director, said “Based on strong execution in Q2, we met our expectations for revenue growth, bookings, and margins. We continued to expand our top accounts, large deal bookings surpassed $1 Bn once again, and Capco maintained its momentum for another consecutive quarter. We grew in three out of four markets, as well as, in BFSI, Consumer and Technology and Communications sectors. We will continue to invest in our clients, our strategic priorities, and building a strong AI powered Wipro.”
Aparna Iyer, Chief Financial Officer, said “I am pleased with our performance across all parameters including Revenue, Bookings, Operating margin, cash flow and EPS. On the back of operational improvements, we further expanded our margins by 35 basis points and our EPS grew 6.8% QoQ. Our operating cash flow continues to be robust at 132.3% of net income in Q2. As a result, cumulatively in the first half of this year we generated nearly $1B in operating cash flow.”
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 = Rs83.76, as published by the Federal Reserve Board of Governors on September 30, 2024. However, the realized exchange rate in our IT Services business segment for the quarter ended September 30, 2024, was US$1= Rs83.44
2. Constant currency for a period is the product of volumes in that period times the average actual exchange rate of the corresponding comparative period.
3. Total Bookings refers to the total contract value of all orders that were booked during the period including new orders, renewals, and increases to existing contracts. Bookings do not reflect subsequent terminations or reductions related to bookings originally recorded in prior fiscal periods. Bookings are recorded using thenexisting foreign currency exchange rates and are not subsequently adjusted for foreign currency exchange rate fluctuations. The revenues from these contracts accrue over the tenure of the contract.
4. Large deal bookings consist of deals greater than or equal to $30 million in total contract value.
5. IT Services Operating Margin refers to Segment Results Total as reflected in IFRS financials.
6. Voluntary attrition is in IT Services computed on a quarterly annualised basis and excludes DOP.
3 Confidential Public -Internal Highlights of Strategic Deal Wins In the second quarter, Wipro continued to win large and strategic deals across industries.
Key highlights include:
1. A US-based health insurance provider has selected Wipro to streamline its operations. By consolidating the client vendor landscape, Wipro will mitigate the risks associated with relying on multiple providers. The Wipro team will leverage its varied expertise to drive efficiency and innovation, optimize costs, as well as provide the tools and expertise to ensure the accuracy, integrity and security of the customer’s data. This project will ensure better care coordination and health outcomes.
2. A global apparel leader has selected Wipro to enhance its direct-to-consumer strategy and digital footprint. Wipro will transform the client's IT operations and improve overall product development. Wipro will also deploy artificial intelligence in key areas. The project will drive innovation, optimize operations and create a seamless customer experience across both physical and online platforms.
3. A US-based health insurance company has selected Wipro to improve its operations. The Wipro team will consolidate the client’s vendor landscape and provide services with innovative solutions & accelerators to improve overall operational efficiency. This work will enhance customer and employee experience as well as ensure smooth service delivery. Wipro’s deep domain knowledge and consultative and innovative approach, as well as its track record of flawless delivery were key factors contributing to this win.
4. A US-based wholesale food distributor has selected Wipro to reimagine its business operations. Leveraging AI and process transformation tools, Wipro will create a centralized system across key support functions including Human Resources, Financial Planning & Analysis and Data Management. This will help the client enhance efficiency, standardize processes, and achieve cost-effectiveness across its organization.
5. A US-based Free Space Optics Communications pioneer has selected Wipro to engineer their next-generation product & provide global operations and manufacturing support. Wipro will deliver integrated services across hardware, manufacturing, and operational support. Wipro will provide engineering support by leveraging its experience in AI-based silicon and Smart Network Applications, coupled with Field Operations capabilities. This strategic program will deliver enhanced customer experience with high economic value and support the client in rapid product evolution across global markets.
6. Wipro was selected by an American health insurance provider for a workforce management and business process transformation project. The project incorporates AI capabilities to improve efficiency and reduce operation turn-around time by 20%. Wipro will also upskill and equip associates with advanced AI and data analytics skills, providing value-added services to business stakeholders and end-users.
7. A US-based independent health solutions and pharmacy benefit company has selected Wipro to implement the “Payer-in-a-box” Medicare Prescription Payment Plan (MPPP360) platform in compliance with the Centre for Medicare & Medicaid Services’ (CMS) guidance. Wipro will help streamline the client’s member opt in/opt out and billing and delinquency processes, seamlessly integrate the new CMS provisions, and simplify prescription cost management for enrolled beneficiaries.
A European automotive manufacturer has selected Wipro to modernize its IT infrastructure. Wipro will centralize the client’s operations to provide a more stable ecosystem. The team will also develop innovative employee experience solutions, as well as vulnerability management and application maintenance services. This project will improve the client’s time-to-market, significantly reduce their technical debt, and futureproof their business.
9. A UK-based wealth management firm has selected Wipro to provide end-to-end administration service. The team will transform and modernize the client’s technology infrastructure as well as manage their entire middle and back-office functions. This transformation will enable the client to be more agile, drive growth and continue to provide market-leading proposition to its customers.
10. Following its acquisition by a private equity firm, a France-based leader in digital & consulting services has selected Wipro to re-imagine the Finance & Procurement Services into a digital, agile and cost-efficient organization. The Wipro team will deploy tailored solutions to streamline and automate the client’s Order to Cash, General Accounting, Controlling, Source to Pay and end-to-end Procurement processes. A new dedicated business process outsourcing center will also be created in Spain. This project will deliver a cost reduction of up to 30% and establish an innovation fund, to futureproof the client’s business.
11. A global financial technology company has selected Wipro to support their growth. The Wipro team will provide talent and technology to enhance the client’s transaction monitoring and customer lifecycle management processes. Wipro will also implement best-in-class AI and automation solutions to optimize operations and increase overall efficiency. This project will enable the client to scale their business while ensuring regulatory compliance.
12. A global food and drink processing conglomerate has selected Wipro to enhance their delivery quality, governance, and employee experience. Wipro will implement automation technology to reduce manual intervention and monitoring in order to improve service delivery quality. Wipro will also leverage its AI and Gen AI capabilities to support the implementation of AI productivity platforms and an employee Centre of Excellence. From this engagement, the customer will see improved customer satisfaction and increased overall quality of delivery.
13. A leading Indian private bank has extended its engagement with Wipro to enhance its technology infrastructure and deliver support services for critical 'Run the Bank' applications. Aimed at creating a resilient, high-performing, and scalable technology environment, the Wipro team will strengthen end-user services and technology infrastructure, focusing on Cloud, Data and Analytics, and Security. This project will boost operational efficiency and support the bank's growth ambitions across various functions including Retail, Corporate Banking, Credit, Treasury, and Loans.
14. A Middle East based manufacturing company has selected Wipro to transform its business forecasting and operational efficiency by integrating Wipro’s Smart Forecast and Working Capital Insights initiatives in their day-to-day functions. Wipro will deploy AI and big data analytics to improve decision-making, revenue optimization, forecasting accuracy, and overall transparency across functions. The combination of Wipro’s initiatives will enhance the client’s predictive abilities, analytics, decision-making, risk 5 Confidential Public -Internal mitigation, and capability to realize opportunities.
15. An American financial services company has selected Wipro to provide in-depth customer analytics and insights. Wipro will implement AI and GenAI-based solutions to provide a unified and comprehensive 360-degree view of client activity to better serve their needs. These insights will also be the basis of recommendations for discount pricing, deposit levels, and trading volumes. Subsequent phases of this project will expand to a strategic AI-powered data lake that encompasses more of the client’s services.
