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Wipro: A Good Topline Performance - Views on News from Equitymaster
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Wipro: A Good Topline Performance
Apr 21, 2016

Wipro has announced its results for the fourth quarter and full year FY16. The company has reported a 6.1% QoQ increase in sales while net profits were flat sequentially. Here is our analysis of the results.

Performance summary
  • Consolidated net sales increased by 6.1% QoQ during the quarter. IT services revenues were up 3.9% QoQ in rupee terms, 2.7% QoQ in constant currency terms and 2.4% QoQ in US dollar terms. Full year FY16 sales were up 9.1% YoY.
  • The operating margin was slightly down sequentially to 21.2% in 4QFY16. On an absolute basis, the operating profit increased by 5.4% QoQ.
  • The net profit was flat sequentially due to a 9.8% QoQ fall in other income and a 14.3% QoQ increase in depreciation. The full year FY16 net profit was up 2.8% YoY.
  • The company declared a final dividend of Re 1 per share to be approved at the AGM.
  • The company completed the acquisition of Health Plan Services, a BPaaS company in the US.
  • The company has announced a buyback of 40 million equity shares representing 1.62% of the company's share capital at a price of Rs 625 per share. The promoters will participate in the buyback. The promoters own 73.34% of the company's shares as on 31st March 2016.

    Consolidated financial performance
    (Rs m) 3QFY16 4QFY16 Change FY15 FY16 Change
    Rrevenues 129,516 137,417 6.1% 473,180 516,307 9.1%
    Expenditure 101,878 108,277 6.3% 364,934 404,321 10.8%
    Operating profit 27,638 29,140 5.4% 108,246 111,986 3.5%
    Operating profit margin (%) 21.3% 21.2% 22.9% 21.7%
    Other income 6,227 5,617 -9.8% 19,859 23,280 17.2%
    Finance expenses 1,423 1,284 -9.8% 3,599 5,582 55.1%
    Depreciation 3,764 4,304 14.3% 12,823 14,965 16.7%
    Profit before tax 28,678 29,169 1.7% 111,683 114,719 2.7%
    Tax 6,248 6,626 6.0% 24,624 25,305 2.8%
    Profit after tax 22,430 22,543 0.5% 87,059 89,414 2.7%
    Minority interest 89 193 116.9% 531 492 -7.3%
    Net profit 22,341 22,350 0.0% 86,528 88,922 2.8%
    Net profit margin (%) 17.2% 16.3% 18.3% 17.2%
    No. of shares (m) 2,470.7
    Diluted earnings per share (Rs)* 36.0
    P/E ratio (x)* 15.5

    * On a trailing 12-months basis

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