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WIPRO 2017-18 Annual Report Analysis
Sat, 31 Mar

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 8.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 19.0% in FY18 as against 20.4% in FY17.
  • Depreciation charges decreased by 8.6% and finance costs decreased by 1.9% YoY, respectively.
  • Other income declined by 2.4% YoY.
  • Net profit for the year declined by 6.1% YoY.
  • Net profit margins during the year declined from 15.4% in FY17 to 14.7% 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 25,594 -2.4%
Total Revenues Rs m 580,710 570,465 -1.8%
Gross profit Rs m 113,209 103,764 -8.3%
Depreciation Rs m 23,100 21,117 -8.6%
Interest Rs m 5,942 5,830 -1.9%
Profit before tax Rs m 110,393 102,411 -7.2%
Tax Rs m 25,214 22,391 -11.2%
Profit after tax Rs m 85,179 80,020 -6.1%
Gross profit margin % 20.4 19.0
Effective tax rate % 22.8 21.9
Net profit margin % 15.4 14.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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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 2% and stood at Rs 244 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 750 billion as against Rs 787 billion during FY17, thereby witnessing a fall of 5%.

WIPRO Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 513,147 477,491 -6.9
 
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 786,722 750,025 -4.7
 
Current assets Rs m 538,898 506,156 -6.1
Fixed Assets Rs m 247,824 243,869 -1.6
Total Assets Rs m 786,722 750,025 -4.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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: Accord Fintech, 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 281.5, stands at 19.3 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 3.2 times, while the price to sales ratio stands at 2.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 12.9 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 15.5 14.6
Price to Cash Flow x 26.1 12.9
TTM P/E ratio x 33.2 19.3
Price / Book Value ratio x 2.7 2.7
Market Cap Rs m 1,378,807 1,301,719
Dividends per share (Unadj.) Rs 2.0 1.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 16.8% during FY18, from 16.6% 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 20.7% during FY18, from 21.8% 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 11.4% during FY18, from 11.6% 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 % 11.6 11.4
Return on equity % 16.6 16.8
Return on capital employed % 21.8 20.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 down from Rs 515.4 to Rs 281.5, registering a loss of Rs 233.9 or around 45.4%.

Meanwhile, the S&P BSE IT Index is trading at Rs 12,100.6 (down 0.3%). Over the last one year it has moved up from 10,365.5 to 12,100.6, a gain of 1,735 points (up 16.7%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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

Annual Report FAQs

What is the current share price of WIPRO?

WIPRO currently trades at Rs 480.1 per share. You can check out the latest share price performance of WIPRO here...

What was the revenue of WIPRO in FY18? How does it compare to earlier years?

The revenues of WIPRO stood at Rs 570,465 m in FY18, which was down -1.8% compared to Rs 580,710 m reported in FY17.

WIPRO's revenue has grown from Rs 453,378 m in FY14 to Rs 570,465 m in FY18.

Over the past 5 years, the revenue of WIPRO has grown at a CAGR of 5.9%.

What was the net profit of WIPRO in FY18? How does it compare to earlier years?

The net profit of WIPRO stood at Rs 80,020 m in FY18, which was down -6.1% compared to Rs 85,179 m reported in FY17.

This compares to a net profit of Rs 89,571 m in FY16 and a net profit of Rs 87,140 m in FY15.

Over the past 5 years, WIPRO net profit has grown at a CAGR of 0.0%.

What does the cash flow statement of WIPRO reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of WIPRO reveals:

  • Cash flow from operations decreased in FY18 and stood at Rs 84,233 m as compared to Rs 92,773 m in FY17.
  • Cash flow from investments increased in FY18 and stood at Rs 35,578 m as compared to Rs -116,283 m in FY17.
  • Cash flow from financial activity decreased in FY18 and stood at Rs -129,978 m as compared to Rs -22,752 m in FY17.

Here's the cash flow statement of WIPRO for the past 5 years.

(Rs m)FY14FY15FY16FY17FY18
From Operations67,90078,40478,87392,77384,233
From Investments-2,773-25,957-138,156-116,28335,578
From Financial Activity-35,695-8,297-1,587-22,752-129,978
Net Cashflow29,36344,739-60,321-47,674-9,792

What does the Key Ratio analysis of WIPRO reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of WIPRO reveals:

  • Operating profit margins witnessed a fall and stood at 19.0% in FY18 as against 20.4% in FY17.
  • Net profit margins declined from 15.4% in FY17 to 14.7% in FY18.
  • Debt to Equity ratio for FY18 stood at 0.1 as compared to 0.0 in FY17.

Here's the ratio/financial analysis of WIPRO for the past 5 years.

 FY14FY15FY16FY17FY18
Operating Profit Margin (%)22.221.921.120.419.0
Net Profit Margin (%)18.418.617.515.414.7
Debt to Equity Ratio (x)0.00.00.00.00.1

Read: Latest Annual Report Analysis of WIPRO

 

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1 Responses to "WIPRO 2017-18 Annual Report Analysis"

Nidhin

Jun 27, 2020

in the ratios can you help me with the calculations.

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