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Wipro: A Good Performance - Views on News from Equitymaster
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Wipro: A Good Performance
May 4, 2017

Wipro has announced its results for the fourth quarter and full year FY17. The company has reported a 2.2% QoQ increase in sales while the net profit was up 7.2% QoQ in 4QFY17.

Performance summary
  • Consolidated sales increased by 2.2% QoQ during the quarter. IT services revenues were up 1.6% QoQ in rupee terms, 1.7% QoQ in constant currency terms, and up 2.7% QoQ in US dollar terms.
  • The operating margin was down sequentially to 20.6%. On an absolute basis, the operating profit increased by 1% QoQ.
  • The net profit was up sequentially by 7.2% QoQ. The net margin came in at 16.1%.
  • The company did not declare a final dividend.
  • The company announced a 1:1 bonus issue subject to shareholder approval.
  • The company announced a buyback, the details of which will be finalised in the month of July 2017.

    Consolidated Financial Performance
    (Rs m) 3QFY17 4QFY17 Change FY16 FY17 Change
    Gross revenues 137,645 140,620 2.2% 516,307 554,209 7.3%
    Expenditure 108,999 111,694 2.5% 404,482 441,275 9.1%
    Operating profit 28,646 28,926 1.0% 111,825 112,934 1.0%
    Operating profit margin (%) 20.8% 20.6% 21.7% 20.4%
    Other income 5,719 9,718 69.9% 23,655 25,742 8.8%
    Finance expenses 1,366 1,053 -22.9% 5,582 5,183 -7.1%
    Depreciation 5,410 8,179 51.2% 14,961 23,100 54.4%
    Profit before tax 27,589 29,412 6.6% 114,937 110,393 -4.0%
    Tax 6,441 6,742 4.7% 25,366 25,214 -0.6%
    Profit after tax 21,148 22,670 7.2% 89,571 85,179 -4.9%
    Minority interest & others 52 58 11.5% 492 248 -49.6%
    Net profit 21,096 22,612 7.2% 89,079 84,931 -4.7%
    Net profit margin (%) 15.3% 16.1% 17.3% 15.3%
    No. of shares (m) 2,430.9
    Diluted earnings per share (Rs)* 34.9
    P/E ratio (x)* 14.2
    * On a trailing 12-months basis

    Business Mix
    Revenue breakup for IT services (Rs m) 3QFY17 4QFY17 Change
    Based on geography
    Americas 76,393 77,200 1.1%
    Europe 32,484 34,311 5.6%
    India and Middle East 13,765 13,921 1.1%
    RoW 15,003 15,187 1.2%
    Based on service offerings
    Analytics 9,635 9,703 0.7%
    Global Infrastructure Services 38,678 39,374 1.8%
    Application Services 61,114 64,263 5.2%
    Product Engineering 9,910 9,984 0.7%
    BPO 18,307 17,296 -5.5%
    Based on verticals
    Communications 10,186 9,703 -4.7%
    Finance Solutions 35,099 36,561 4.2%
    Manufacturing & Technology 30,695 32,061 4.5%
    Healthcare, Life Sciences & Services 22,023 21,655 -1.7%
    Consumer 21,748 22,218 2.2%
    Energy and Utilities 17,894 18,421 2.9%
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