Helping You Build Wealth With Honest Research
Since 1996. Try Now

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  


WIPRO 2020-21 Annual Report Analysis
Wed, 31 Mar

WIPRO has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

WIPRO Income Statement Analysis

  • Operating income during the year rose 1.3% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 18.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 23.6% in FY21 as against 20.2% in FY20.
  • Depreciation charges increased by 32.5% and finance costs decreased by 30.6% YoY, respectively.
  • Other income declined by 7.2% YoY.
  • Net profit for the year grew by 11.1% YoY.
  • Net profit margins during the year grew from 16.0% in FY20 to 17.5% in FY21.

WIPRO Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 611,376 619,430 1.3%
Other income Rs m 27,250 25,295 -7.2%
Total Revenues Rs m 638,626 644,725 1.0%
Gross profit Rs m 123,423 146,326 18.6%
Depreciation Rs m 20,855 27,634 32.5%
Interest Rs m 7,328 5,088 -30.6%
Profit before tax Rs m 122,490 138,899 13.4%
Tax Rs m 24,801 30,349 22.4%
Profit after tax Rs m 97,689 108,550 11.1%
Gross profit margin % 20.2 23.6
Effective tax rate % 20.2 21.8
Net profit margin % 16.0 17.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



New Research: 2 stocks to buy as Nifty50 heads towards 40,000

WIPRO Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 230 billion as compared to Rs 216 billion in FY20, thereby witnessing an increase of 6.3%.
  • Long-term debt stood at Rs 7 billion as compared to Rs 5 billion during FY20, a growth of 54.1%.
  • Current assets rose 1% and stood at Rs 523 billion, while fixed assets rose 5% and stood at Rs 302 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 826 billion as against Rs 807 billion during FY20, thereby witnessing a growth of 2%.

WIPRO Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 551,667 545,939 -1.0
 
Current Liabilities Rs m 216,393 230,040 6.3
Long-term Debt Rs m 4,840 7,458 54.1
Total Liabilities Rs m 806,784 825,658 2.3
 
Current assets Rs m 519,851 523,186 0.6
Fixed Assets Rs m 286,933 302,472 5.4
Total Assets Rs m 806,784 825,658 2.3
* 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 FY21 stood at Rs 148 billion, an improvement of 46.6% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs 8 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -129 billion, an improvement of 15% on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs 26 billion from the Rs -14 billion net cash flows seen during FY20.

WIPRO Cash Flow Statement 2020-21

Particulars No. of months 12 12 % Change
Year Ending Mar-20 Mar-21
Cash Flow from Operating Activities Rs m 100,643 147,550 46.6%
Cash Flow from Investing Activities Rs m 34,012 7,739 -77.2%
Cash Flow from Financing Activities Rs m -150,998 -128,840 -
Net Cash Flow Rs m -14,421 25,559 -
* 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 19.8, an improvement from the EPS of Rs 17.1 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 414.2, stands at 20.9 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 4.2 times, while the price to sales ratio stands at 3.7 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-20* 12 Mar-21*
Sales per share (Unadj.) Rs 107.0 113.1
TTM Earnings per share Rs 17.1 19.8
Diluted earnings per share Rs 17.8 19.8
Price to Cash Flow x 9.1 12.9
TTM P/E ratio x 11.0 20.9
Price / Book Value ratio x 2.4 3.2
Market Cap Rs m 1,316,929 1,756,612
Dividends per share (Unadj.) Rs 1.0 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 deteriorated and stood at 2.3x during FY21, from 2.4x during FY20. 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 improved and stood at 28.3x during FY21, from 17.7x during FY20. 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 19.9% during FY21, from 17.7% during FY21. 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 26.0% during FY21, from 23.3% during FY20. 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 13.8% during FY21, from 13.0% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Current ratio x 2.4 2.3
Debtors’ Days Days 62 56
Interest coverage x 17.7 28.3
Debt to equity ratio x 0.0 0.0
Return on assets % 13.0 13.8
Return on equity % 17.7 19.9
Return on capital employed % 23.3 26.0
* 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 up from Rs 196.6 to Rs 414.2, registering a gain of Rs 217.6 or around 110.7%.

Meanwhile, the S&P BSE IT Index is trading at Rs 26,543.2 (down 0.7%). Over the last one year it has moved up from 12,842.7 to 26,543.2, a gain of 13,701 points (up 106.7%).

Overall, the S&P BSE SENSEX is up 74.1% 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 FY21? How does it compare to earlier years?

The revenues of WIPRO stood at Rs 644,725 m in FY21, which was up 1.0% compared to Rs 638,626 m reported in FY20.

WIPRO's revenue has grown from Rs 580,710 m in FY17 to Rs 644,725 m in FY21.

Over the past 5 years, the revenue of WIPRO has grown at a CAGR of 2.6%.

What was the net profit of WIPRO in FY21? How does it compare to earlier years?

The net profit of WIPRO stood at Rs 108,550 m in FY21, which was up 11.1% compared to Rs 97,689 m reported in FY20.

This compares to a net profit of Rs 90,222 m in FY19 and a net profit of Rs 80,020 m in FY18.

Over the past 5 years, WIPRO net profit has grown at a CAGR of 6.2%.

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 increased in FY21 and stood at Rs 147,550 m as compared to Rs 100,643 m in FY20.
  • Cash flow from investments decreased in FY21 and stood at Rs 7,739 m as compared to Rs 34,012 m in FY20.
  • Cash flow from financial activity increased in FY21 and stood at Rs -128,840 m as compared to Rs -150,998 m in FY20.

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

(Rs m)FY17FY18FY19FY20FY21
From Operations92,77384,233116,316100,643147,550
From Investments-116,28335,57850,12634,0127,739
From Financial Activity-22,752-129,978-49,369-150,998-128,840
Net Cashflow-47,674-9,792117,599-14,42125,559

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 down at 23.6% in FY21 as against 20.2% in FY20.
  • Net profit margins grew from 16.0% in FY20 to 17.5% in FY21.
  • Debt to Equity ratio for FY21 stood at 0.0 as compared to 0.0 in FY20.

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

 FY17FY18FY19FY20FY21
Operating Profit Margin (%)20.419.019.720.223.6
Net Profit Margin (%)15.414.715.316.017.5
Debt to Equity Ratio (x)0.00.10.10.00.0

Read: Latest Annual Report Analysis of WIPRO

 

Equitymaster requests your view! Post a comment on "WIPRO 2020-21 Annual Report Analysis". Click here!