IT Services Revenue Crosses rupees 100 billion per quarter

BANGALORE, India and EAST BRUNSWICK, N.J., Oct. 22, 2013 /PRNewswire/ -- Wipro Limited (NYSE: WIT) today announced financial results under International Financial Reporting Standards (IFRS) for its second quarter ended September 30, 2013.

Highlights of the Results:
Results for the Quarter ended September 30, 2013:

• Revenues from continuing operations were rupees 109.92 billion ($1.76 billion¹), an increase of 19% YoY.
• Net Income from continuing operations was rupees 19.32 billion ($309 million¹), an increase of 28% YoY.
• Non-GAAP Adjusted Net Income from continuing operations was rupees 19.32 billion ($309 million¹), an increase of 29% YoY.
• Non-GAAP constant currency IT Services Revenue in dollar terms grew 3.2% sequentially and 7.9% YoY
• IT Services Revenue was $1,631.1 million, a sequential increase of 2.7% and YoY increase of 5.9%.
• IT Services Revenues in Rupee terms was rupees 100.68 billion ($1,609 million¹), an increase of 20% YoY.
• IT Services Earnings Before Interest and Tax (EBIT) was rupees 22.64 billion ($362 million¹), an increase of 31% YoY.
• Operating Income to Revenue for IT Services was 22.5% for the quarter.

Performance for the quarter ended September 30, 2013
Azim Premji, Chairman of Wipro, commenting on the results said – "There are positive indicators on the global economy. Client confidence is on the uptick and we see it reflected in our results." 

T K Kurien, Executive Director & Chief Executive Officer of Wipro, said – "We achieved a broad based revenue growth across all industry verticals and continue to focus on executing to our strategy."

Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro, said – "Our sustained execution towards increasing operational efficiencies in the business coupled with currency benefits helped offset the impact of wage hikes resulting in strong improvements in operating margins."

Outlook for the Quarter ending December 31, 2013
We expect Revenues from our IT Services business to be in the range of $1,660 million to $1,690 million*.

* Guidance is based on the following exchange rates: GBP/USD at 1.57, Euro/USD at 1.34, AUD/USD at 0.93, USD/INR at 61.98

IT Services
The IT Services segment had 147,216 employees as of September 30, 2013. We added 45 new customers for the quarter.

Wipro has signed a large multi-year deal with a leading Banking & Financial Services company in the United States. As part of the deal, Wipro will be a preferred partner to provide application development, support and testing services across multiple lines of business.

Wipro has won a large multi-year contract with a leading bank in the United States. The integrated IT and BPO deal further enhances Wipro's capabilities in the payments technology and payments processing domain.

Wipro has won a large multi-year engagement in the KPO space with a global leader in business and financial information, wherein it will provide high-end research and data analysis support to the customer. The deal includes a renewal of existing work as well as addition of new scope of work.

One of the world's largest healthcare diagnostics players has engaged Wipro to achieve a cost reduction of over 30% through various initiatives including consolidation of data centers and systems rationalization.

Awards and accolades
Wipro was ranked as a leader in the 'Global R&D Service Provider' survey for the fourth successive year in Zinnov Management Consulting's Global R&D Service Providers Rating 2013. The survey analyzed the top 75 R&D service providers across the world in 13 major industry segments. Service Providers were evaluated on the basis of their capabilities and vertical coverage and the analysis includes user experience, systems software, embedded systems, mechanical & electrical engineering services and engineering analytics.

Wipro was included as a member of the global Dow Jones Sustainability Index (DJSI) - 2013 for the fourth year in succession. Wipro is the only Indian company to be included in both the DJSI World and Emerging Markets Indices. A total of 1,831 companies were assessed from around the world of which 333 were chosen as the DJSI constituents for the year 2013-14, and the IT Services sector saw 65 companies participating globally of which 7 were selected for the World Index.

Wipro launched a Co-Innovation Center for SAP Solutions in Bangalore. The focus of this partner research center for co-innovation is to drive innovation based on SAP^® solutions. Wipro anticipates that participants in the center will develop best-in-class solutions based on the SAP HANA^® platform, as well as next-generation technologies including mobility and analytics to offer integrated offerings based on SAP HANA for customers.

Wipro was recognized with the One-EMC Partner of the Year Award at EMC India Partner Summit 2013 for maximum revenue achievement in all product lines (including services) of EMC services

IT Products

• Our IT Products segment delivered Revenue of rupees 9.37 billion ($150 million¹) for the quarter, a YoY increase of 4%.
• EBIT was rupees 152 million ($2 million¹) for the quarter.
• Operating Income to Revenue for this segment was 1.6% for the quarter.

Please see the table on page 6 for a reconciliation between (i) IFRS Net Income and non-GAAP Adjusted Net Income (excluding the impact of stock-based compensation) and (ii) IFRS IT Services Revenue and IT Services Revenue on a non-GAAP constant currency basis.

About Non-GAAP financial measures
This press release contains non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K. Such non-GAAP financial measures are measures of our historical or future performance, financial position or cash flows that are adjusted to exclude or include amounts that are excluded or included, as the case may be, from the most directly comparable financial measure calculated and presented in accordance with IFRS.

The table on page 6 provides Adjusted Net Income for the period, which is a non-GAAP measure that excludes the impact of accelerated amortization in respect of stock options that vest in a graded manner, and IT Services Revenue on a constant currency basis, which is a non-GAAP measure that is calculated by translating IT Services Revenue from the current reporting period into U.S. dollars based on the currency conversion rate in effect for the prior reporting period. We consider a stock option award with a graded vesting schedule to be in substance a single award and not multiple stock option awards and accordingly believe the straight line amortization reflects the economic substance of the award. We refer to growth rates in constant currency so that business results may be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance. We believe that the presentation of this Non-GAAP Adjusted Net Income, when shown in conjunction with the corresponding IFRS measure, provides useful information to investors and management regarding financial and business trends relating to its Net Income for the period.

These Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, the most directly comparable financial measure calculated in accordance with IFRS, and may be different from non-GAAP measures used by other companies. In addition to these non-GAAP measures, the financial statements prepared in accordance with IFRS and the reconciliation of these non-GAAP financial measures with the most directly comparable IFRS financial measure should be carefully evaluated.

For internal budgeting process, our management also uses financial statements that exclude the impact of accelerated amortization relating to stock options that vest in a graded manner. Management of the Company also uses Non-GAAP Adjusted Net Income, in addition to the corresponding IFRS measure, in reviewing our financial results.

Results for the quarter ended September 30, 2013, computed under IFRS, along with individual business segment reports, are available in the Investors section of our website at www.wipro.com.

¹ For the convenience of the reader, the amounts in Indian rupees in this release have been translated into United States dollars at the noon buying rate in New York City on September 30, 2013, for cable transfers in Indian rupees, as certified by the Federal Reserve Board of New York, which was US $1= rupees 62.58. However, the realized exchange rate in our IT Services business segment for the quarter ended September 30, 2013 was US$1= rupees 61.73

Quarterly Conference Call
We will hold a conference call today at 06:45 p.m. Indian Standard Time (09:15 a.m. US Eastern Time) to discuss our performance for the quarter. An audio recording of the management discussions and the question and answer session will be available online and will be accessible in the Investor Relations section of our website at www.wipro.com.

About Wipro Limited (NYSE: WIT)
Wipro provides comprehensive IT solutions and services, including systems integration, Information Systems outsourcing, IT enabled services, package implementation, software application development and maintenance, and research and development services to corporations globally. Wipro Limited is the first PCMM Level 5 and SEI CMM Level 5 certified IT Services Company globally.

For more information, please visit our websites at www.wipro.com.

Forward-looking and Cautionary Statements
The forward-looking statements contained herein represent Wipro's beliefs regarding future events, many of which are by their nature, inherently uncertain and outside Wipro's control. Such statements include, but are not limited to, statements regarding Wipro's growth prospects, its future financial operating results, and its plans, expectations and intentions. Wipro cautions readers that the forward-looking statements contained herein are subject to risks and uncertainties that could cause actual results to differ materially from the results anticipated by such statements. Such risks and uncertainties include, but are not limited to, risks and uncertainties regarding fluctuations in our earnings, revenue and profits, our ability to generate and manage growth, intense competition in IT services, our ability to maintain our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which we make strategic investments, withdrawal of fiscal governmental incentives, political instability, war, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property, and general economic conditions affecting our business and industry. Additional risks that could affect our future operating results are more fully described in our filings with the United States Securities and Exchange Commission, including, but not limited to, Annual Reports on Form 20-F. These filings are available at www.sec.gov. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf.

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SOURCE Wipro Limited