WIPRO 2021-22 Annual Report Analysis

Mon, 16 May

WIPRO has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

WIPRO Income Statement Analysis

• Operating income during the year rose 28.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 13.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 20.9% in FY22 as against 23.6% in FY21.
• Depreciation charges increased by 11.9% and finance costs increased by 4.7% YoY, respectively.
• Other income declined by 15.4% YoY.
• Net profit for the year grew by 12.6% YoY.
• Net profit margins during the year declined from 17.5% in FY21 to 15.4% in FY22.

WIPRO Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	619,430	793,120	28.0%
Other income	Rs m	25,295	21,409	-15.4%
Total Revenues	Rs m	644,725	814,529	26.3%
Gross profit	Rs m	146,326	166,045	13.5%
Depreciation	Rs m	27,634	30,911	11.9%
Interest	Rs m	5,088	5,325	4.7%
Profit before tax	Rs m	138,899	151,218	8.9%
Tax	Rs m	30,349	28,946	-4.6%
Profit after tax	Rs m	108,550	122,272	12.6%
Gross profit margin	%	23.6	20.9
Effective tax rate	%	21.8	19.1
Net profit margin	%	17.5	15.4

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WIPRO Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 308 billion as compared to Rs 230 billion in FY21, thereby witnessing an increase of 34.0%.
• Long-term debt stood at Rs 56 billion as compared to Rs 7 billion during FY21, a growth of 657.1%.
• Current assets rose 19% and stood at Rs 621 billion, while fixed assets rose 51% and stood at Rs 456 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 1,077 billion as against Rs 826 billion during FY21, thereby witnessing a growth of 30%.

WIPRO Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	545,939	652,900	19.6
Current Liabilities	Rs m	230,040	308,329	34.0
Long-term Debt	Rs m	7,458	56,463	657.1
Total Liabilities	Rs m	825,658	1,076,884	30.4
Current assets	Rs m	523,186	620,752	18.6
Fixed Assets	Rs m	302,472	456,132	50.8
Total Assets	Rs m	825,658	1,076,884	30.4

WIPRO Cash Flow Statement Analysis

• WIPRO's cash flow from operating activities (CFO) during FY22 stood at Rs 111 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -224 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 47 billion, an improvement of 136% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs -66 billion from the Rs 26 billion net cash flows seen during FY21.

WIPRO Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	147,550	110,797	-24.9%
Cash Flow from Investing Activities	Rs m	7,739	-224,495	-
Cash Flow from Financing Activities	Rs m	-128,840	46,586	-
Net Cash Flow	Rs m	25,559	-65,830	-

Current Valuations for WIPRO

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 22.3, an improvement from the EPS of Rs 19.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 469.1, stands at 21.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.9 times, while the price to sales ratio stands at 3.2 times.
• The company's price to cash flow (P/CF) ratio stood at 20.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	113.1	144.7
TTM Earnings per share	Rs	19.8	22.3
Diluted earnings per share	Rs	19.8	22.3
Price to Cash Flow	x	16.7	20.6
TTM P/E ratio	x	20.9	21.0
Price / Book Value ratio	x	3.2	4.8
Market Cap	Rs m	1,756,612	3,159,180
Dividends per share (Unadj.)	Rs	1.0	6.0

Ratio Analysis for WIPRO

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.0x during FY22, from 2.3x during FY21. 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 29.4x during FY22, from 28.3x during FY21. 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 18.7% during FY22, from 19.9% during FY22. 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 22.1% during FY22, from 26.0% during FY21. 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 11.8% during FY22, from 13.8% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	2.3	2.0
Debtors’ Days	Days	56	53
Interest coverage	x	28.3	29.4
Debt to equity ratio	x	0.0	0.1
Return on assets	%	13.8	11.8
Return on equity	%	19.9	18.7
Return on capital employed	%	26.0	22.1

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 498.4 to Rs 469.1, registering a loss of Rs 29.3 or around 5.9%.

Meanwhile, the S&P BSE IT Index is trading at Rs 29,792.8 (down 0.6%). Over the last one year it has moved up from 26,131.6 to 29,792.8, a gain of 3,661 points (up 14.0%).

Overall, the S&P BSE SENSEX is up 8.8% over the year.

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

Read: Latest Annual Report Analysis of WIPRO