Wipro (WIPRO) Q4 04/05 earnings summary

Executive summary

• FY05 consolidated segment revenue rose 39% YoY to Rs 81,698m; profit after tax reached Rs 16,285m, up 58% YoY.

• Growth was broad across business lines and geographies; operating margin recovered to 22% from 19% as profits grew faster than revenue.

Financial highlights

• Consolidated Indian-GAAP PBT was Rs 18,948m, up 57% YoY; PAT was Rs 16,285m, up 58%; EPS was Rs 23.41 basic and Rs 23.19 diluted.

• Under U.S. GAAP, FY05 revenue was Rs 81,353m, operating income Rs 17,857m and net income Rs 15,833m; basic EPS was Rs 22.76.

• Q4 FY05 segment revenue rose 29% YoY to Rs 23,121m; PBT increased 27% to Rs 5,019m and PAT rose 35% to Rs 4,330m.

• Operating cash flow reached Rs 19,006m versus Rs 10,815m in FY04; capital expenditure was Rs 6,613m.

Outlook and guidance

• Strategic priorities include expanding global IT services, emerging technology offerings, R&D, consulting and BPO, while broadening client penetration and geographic reach.

• Capacity additions lifted development-center seats from 17,893 in FY04 to 27,434 in FY05 and BPO seats from 7,441 to 10,039.

• Margin improvement faces ongoing pressure from pricing, onsite delivery mix, wage and stock-compensation costs, currency movements, attrition and fixed BPO costs; focus areas include productivity and cost control.