WIPRO 2020-21 Annual Report Analysis

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WIPRO 2020-21 Annual Report Analysis
Thu, 8 Jul

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 15.3% in FY20 to 16.8% 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 % 15.3 16.8
* 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 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 529.8, stands at 26.7 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 2.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 21.3 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 25.5 21.3
TTM P/E ratio x 27.9 26.7
Price / Book Value ratio x 2.4 3.2
Market Cap Rs m 3,026,937 2,902,891
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 223.0 to Rs 529.8, registering a gain of Rs 306.8 or around 137.6%.

Meanwhile, the S&P BSE IT Index is trading at Rs 29,624.8 (down 0.5%). Over the last one year it has moved up from 15,680.9 to 29,624.8, a gain of 13,944 points (up 88.9%).

Overall, the S&P BSE SENSEX is up 44.1% over the year.

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

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WIPRO Announces Quarterly Results (3QFY21); Net Profit Up 21.5% (Quarterly Result Update)

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For the quarter ended December 2020, WIPRO has posted a net profit of Rs 30 bn (up 21.5% YoY). Sales on the other hand came in at Rs 157 bn (up 1.3% YoY). Read on for a complete analysis of WIPRO's quarterly results.

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Here's an analysis of the annual report of WIPRO for 2019-20. It includes a full income statement, balance sheet and cash flow analysis of WIPRO. Also includes updates on the valuation of WIPRO.

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