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Wipro: Along Expected Lines - Views on News from Equitymaster

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Wipro: Along Expected Lines
Oct 24, 2017

Wipro has announced its results for the second quarter of FY18. The company reported a 1.5% QoQ decrease in sales while the net profit was up 5.5% QoQ.

Performance Summary
  • Consolidated sales decreased by 1.5% QoQ during the quarter. IT services revenues were up 1.1% QoQ in rupee term, 0.3% QoQ in constant currency terms, and 2.1% QoQ in US dollar terms.
  • The operating margin was up to 20.7%. The operating profit increased by 4.1% QoQ.
  • The net profit was up 5.5% QoQ. The net margin came in at 16.3%.

    Consolidated Financials
    (Rs m) 1QFY18 2QFY18 Change 1HFY17 1HFY18 Change
    Gross revenues 136,261 134,234 -1.5% 273,649 270,495 -1.2%
    Expenditure 109,578 106,446 -2.9% 220,582 216,024 -2.1%
    Operating profit 26,683 27,788 4.1% 53,067 54,471 2.6%
    Operating profit margin (%) 19.6% 20.7%   19.4% 20.1%  
    Other income 6,553 7,114 8.6% 12,570 13,667 8.7%
    Finance expenses 1,474 1,386 -6.0% 2,764 2,860 3.5%
    Depreciation & amortisation 4,943 5,200 5.2% 9,514 10,143 6.6%
    Profit before tax 26,819 28,316 5.6% 53,359 55,135 3.3%
    Tax 5,994 6,426 7.2% 12,031 12,420 3.2%
    Profit after tax 20,825 21,890 5.1% 41,328 42,715 3.4%
    Minority interest & others 60 -27   138 33  
    Net profit 20,765 21,917 5.5% 41,190 42,682 3.6%
    Net profit margin (%) 15.2% 16.3%   15.1% 15.8%  
    No. of shares (m)         4,866.7  
    Diluted earnings per share (Rs)*         17.8  
    P/E ratio (x)*         16.7  
    *On a trailing 12-months basis

    Segmental Performance (IT Services)
    1QFY18 2QFY18 Change
    Based on geography      
    Americas 70,990 70,585 -0.6%
    Europe 31,522 33,054 4.9%
    India and Middle East 14,198 15,013 5.7%
    RoW 13,547 13,037 -3.8%
    Based on service offerings      
    Analytics 9,287 9,389 1.1%
    Global Infrastructure Services 36,602 37,400 2.2%
    Application Services 59,657 59,918 0.4%
    Product Engineering 9,079 9,087 0.1%
    BPO 15,631 15,934 1.9%
    Based on verticals      
    Communications 8,857 8,560 -3.4%
    BFSI 34,778 36,346 4.5%
    Manufacturing & Technology 29,308 30,025 2.4%
    Healthcare & Life Sciences 19,278 18,041 -6.4%
    Consumer Business Unit 20,580 20,939 1.7%
    Energy, Natural Resources and Utilities 17,454 17,778 1.9%
    Total IT Services Revenue 130,256 131,689 1.1%
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