WIPRO 2017-18 Annual Report Analysis

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WIPRO 2017-18 Annual Report Analysis
Tue, 21 Aug

WIPRO has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

WIPRO Income Statement Analysis

  • Operating income during the year fell 1.7% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 8.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 19.1% in FY18 as against 20.4% in FY17.
  • Depreciation charges and finance costs decreased by 8.6% YoY and 1.9% YoY, respectively.
  • Other income declined by 2.8% YoY.
  • Net profit for the year declined by 6.0% YoY.
  • Net profit margins during the year declined from 14.7% in FY17 to 14.0% in FY18.

WIPRO Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 554,484 544,871 -1.7%
Other income Rs m 26,226 25,487 -2.8%
Total Revenues Rs m 580,710 570,358 -1.8%
Gross profit Rs m 113,209 103,882 -8.2%
Depreciation Rs m 23,100 21,117 -8.6%
Interest Rs m 5,942 5,830 -1.9%
Profit before tax Rs m 110,393 102,422 -7.2%
Tax Rs m 25,214 22,391 -11.2%
Profit after tax Rs m 85,179 80,031 -6.0%
Gross profit margin % 20.4 19.1
Effective tax rate % 22.8 21.9
Net profit margin % 14.7 14.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



WIPRO Balance Sheet Analysis

  • The company's current liabilities during FY18 down at Rs 214 billion as compared to Rs 229 billion in FY17, thereby witnessing an decrease of -7.0%.
  • Long-term debt stood at Rs 45 billion as compared to Rs 20 billion during FY17, a growth of 130.8%.
  • Current assets fell 6% and stood at Rs 506 billion, while fixed assets fell 5% and stood at Rs 196 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 757 billion as against Rs 790 billion during FY17, thereby witnessing a fall of 4%.

WIPRO Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 516,702 479,263 -7.2
 
Current Liabilities Rs m 229,485 213,507 -7.0
Long-term Debt Rs m 19,611 45,268 130.8
Total Liabilities Rs m 789,820 756,933 -4.2
 
Current assets Rs m 538,898 506,156 -6.1
Fixed Assets Rs m 206,242 196,250 -4.8
Total Assets Rs m 789,820 756,933 -4.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



WIPRO Cash Flow Statement Analysis

  • WIPRO's cash flow from operating activities (CFO) during FY18 stood at Rs 84 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs 36 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -130 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs -10 billion from the Rs -48 billion net cash flows seen during FY17.

WIPRO Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 92,773 84,233 -9.2%
Cash Flow from Investing Activities Rs m -116,283 35,578 -
Cash Flow from Financing Activities Rs m -22,752 -129,978 -
Net Cash Flow Rs m -47,674 -9,792 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for WIPRO

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 17.7, an decline from the EPS of Rs 35.0 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 289.5, stands at 17.6 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.7 times, while the price to sales ratio stands at 2.4 times.
  • The company's price to cash flow (P/CF) ratio stood at 13.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 228.1 120.4
TTM Earnings per share Rs 35.0 17.7
Diluted earnings per share Rs 17.5 16.5
Price to Cash Flow x 6.5 13.9
TTM P/E ratio x 8.8 17.6
Price / Book Value ratio x 2.7 2.7
Market Cap Rs m 703,746 1,407,491
Dividends per share (Unadj.) Rs 3.0 1.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for WIPRO

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 2.4x during FY18, from 2.3x during FY17. The current ratio measures the company's ability to pay short-term and long-term obligations.

    Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 18.6x during FY18, from 19.6x during FY17. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

  • Profitability Ratios
  • Return on Equity (ROE): The ROE for the company improved and stood at 16.7% during FY18, from 16.5% during FY18. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

    Return on Capital Employed (ROCE): The ROCE for the company declined and down at 20.6% during FY18, from 21.7% during FY17. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

    Return on Assets (ROA): The ROA of the company declined and down at 11.3% during FY18, from 11.5% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 2.3 2.4
Debtors’ Days Days 62 68
Interest coverage x 19.6 18.6
Debt to equity ratio x 0.0 0.1
Return on assets % 11.5 11.3
Return on equity % 16.5 16.7
Return on capital employed % 21.7 20.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



To see how WIPRO has performed over the last 5 years, please visit here.

WIPRO Share Price Performance

Over the last one year, WIPRO share price has moved up from Rs 288.4 to Rs 289.5, registering a gain of Rs 1.2 or around 0.4%.

Meanwhile, the S&P BSE IT Index is trading at Rs 14,955.5 (up 0.4%). Over the last one year it has moved up from 9,875.8 to 14,955.5, a gain of 5,080 points (up 51.4%).

Overall, the S&P BSE SENSEX is up 22.4% over the year.

(To know more, check out historical annual results for WIPRO and quarterly results for WIPRO)

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