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WIPRO 2018-19 Annual Report Analysis

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WIPRO 2018-19 Annual Report Analysis
Thu, 27 Jun

WIPRO has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

WIPRO Income Statement Analysis

  • Operating income during the year rose 7.5% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 11.8% YoY during the fiscal. Operating profit margins witnessed a fall and down at 19.8% in FY19 as against 19.1% in FY18.
  • Depreciation charges decreased by 7.8% and finance costs increased by 26.5% YoY, respectively.
  • Other income grew by 2.6% YoY.
  • Net profit for the year grew by 12.7% YoY.
  • Net profit margins during the year grew from 14.0% in FY18 to 14.7% in FY19.

WIPRO Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 544,871 585,845 7.5%
Other income Rs m 25,487 26,138 2.6%
Total Revenues Rs m 570,358 611,983 7.3%
Gross profit Rs m 103,882 116,126 11.8%
Depreciation Rs m 21,117 19,467 -7.8%
Interest Rs m 5,830 7,375 26.5%
Profit before tax Rs m 102,422 115,422 12.7%
Tax Rs m 22,391 25,243 12.7%
Profit after tax Rs m 80,031 90,179 12.7%
Gross profit margin % 19.1 19.8
Effective tax rate % 21.9 21.9
Net profit margin % 14.0 14.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



WIPRO Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 214 billion as compared to Rs 214 billion in FY18, thereby witnessing an increase of 0.4%.
  • Long-term debt down at Rs 28 billion as compared to Rs 45 billion during FY18, a fall of 37.3%.
  • Current assets rose 13% and stood at Rs 572 billion, while fixed assets rose 1% and stood at Rs 197 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 829 billion as against Rs 757 billion during FY18, thereby witnessing a growth of 10%.

WIPRO Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 479,263 564,226 17.7
 
Current Liabilities Rs m 213,507 214,350 0.4
Long-term Debt Rs m 45,268 28,368 -37.3
Total Liabilities Rs m 756,933 829,248 9.6
 
Current assets Rs m 506,156 571,906 13.0
Fixed Assets Rs m 196,250 197,300 0.5
Total Assets Rs m 756,933 829,248 9.6
* 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 FY19 stood at Rs 116 billion, an improvement of 38.1% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs 50 billion, an improvement of 40.9% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -49 billion, an improvement of 62% on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs 118 billion from the Rs -10 billion net cash flows seen during FY18.

WIPRO Cash Flow Statement 2018-19

Particulars No. of months 12 12 % Change
Year Ending Mar-18 Mar-19
Cash Flow from Operating Activities Rs m 84,233 116,316 38.1%
Cash Flow from Investing Activities Rs m 35,578 50,126 40.9%
Cash Flow from Financing Activities Rs m -129,978 -49,369 -
Net Cash Flow Rs m -9,792 117,599 -
* 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 14.9, an decline from the EPS of Rs 17.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 281.9, stands at 14.1 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.6 times, while the price to sales ratio stands at 2.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 11.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Sales per share (Unadj.) Rs 120.4 97.1
TTM Earnings per share Rs 17.7 14.9
Diluted earnings per share Rs 17.7 19.9
Price to Cash Flow x 12.6 11.6
TTM P/E ratio x 14.1 14.1
Price / Book Value ratio x 2.7 2.6
Market Cap Rs m 1,275,027 1,275,377
Dividends per share (Unadj.) Rs 1.0 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 2.7x during FY19, from 2.4x during FY18. 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 16.7x during FY19, from 18.6x during FY18. 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 declined and down at 16.0% during FY19, from 16.7% during FY19. 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 improved and stood at 20.7% during FY19, from 20.6% during FY18. 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 improved and stood at 11.8% during FY19, from 11.3% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Current ratio x 2.4 2.7
Debtors’ Days Days 68 63
Interest coverage x 18.6 16.7
Debt to equity ratio x 0.1 0.1
Return on assets % 11.3 11.8
Return on equity % 16.7 16.0
Return on capital employed % 20.6 20.7
* 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 191.9 to Rs 281.9, registering a gain of Rs 90.0 or around 46.9%.

Meanwhile, the S&P BSE IT Index is trading at Rs 15,707.1 (down 0.7%). Over the last one year it has moved up from 13,836.0 to 15,707.1, a gain of 1,871 points (up 13.5%).

Overall, the S&P BSE SENSEX is up 11.6% over the year.

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

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