Wipro (WIPRO) Q4 01/02 earnings summary

Executive summary

• FY02 consolidated profit after tax rose 32% to Rs. 8,854 million; free cash flow increased 88% to Rs. 6,119 million, though results fell short of internal growth expectations.

• Global IT services growth and disciplined pricing supported margins amid the global slowdown and telecom equipment downturn.

• Six Sigma projects generated Rs. 1,095 million in savings; 107 new Global IT Services customers were added, and 82 customers each generated over $1 million in business.

Financial highlights

• Consolidated sales and other income were Rs. 34,926 million for FY02; consolidated profit after tax was Rs. 8,854 million, up 32% YoY.

• Standalone sales and services increased 12% to Rs. 34,162 million; adjusted for non-recurring items, profit after tax rose 30% to Rs. 8,661 million.

• US GAAP revenue increased 10% to Rs. 33,981 million; net income rose to Rs. 8,330 million from Rs. 6,455 million, and basic EPS was Rs. 36.04 versus Rs. 28.15.

• US GAAP operating income increased 10% to Rs. 8,315 million; gross profit was Rs. 13,113 million versus Rs. 11,964 million.

Outlook and guidance

• FY03 priorities: expand system integration and information systems outsourcing, sustain Quality leadership, build Healthcare and Life Science, and strengthen India’s Asia Pacific and Middle East presence.

• Revenue growth strategy centers on customer profitability, higher-value services, offshore delivery, Six Sigma productivity and expanded customer relationships.

• Strategic acquisitions remain an option, not a substitute for organic growth; over Rs. 14 billion in cash and equivalents was held primarily for acquisitions, with shareholder returns to be considered if cash cannot enhance value.