Wipro (WIPRO) Q4 05/06 earnings summary

Executive summary

• FY06 consolidated revenue rose 30% to Rs 106,258 million; PBIT increased 24% to Rs 22,506 million and profit after tax rose 27% to Rs 20,674 million.

• Growth milestones included Global IT revenue above $2 billion, product engineering revenue above $500 million, and profit after tax above Rs 20 billion.

• U.S. GAAP revenue reached Rs 106,107 million, up 30%; net income rose 28% to Rs 20,270 million.

Financial highlights

• Q4 FY06 consolidated revenue was Rs 31,132 million, up 35% YoY; PBT rose 42% to Rs 7,107 million and PAT rose 43% to Rs 6,179 million.

• U.S. GAAP operating income rose 23% to Rs 21,972 million; basic EPS was Rs 14.41 and diluted EPS Rs 14.24.

• Standalone sales were Rs 102,641 million, up 41%; PAT before extraordinary items increased 35% to Rs 20,205 million.

• Operating cash flow was Rs 20,192 million vs Rs 19,006 million in FY05; capital expenditure was Rs 7,486 million.

Outlook and guidance

• Strategy targets continued growth across IT Services, BPO and other businesses, with integrated offerings, domain expertise, innovation and acquisitions supporting expansion.

• Innovation initiatives contributed ~5% of FY06 revenue; the target is 10% within three years.

• Gross-margin pressure from pricing, wage growth, onsite delivery and currency movements was expected to persist; responses include higher-value services, productivity and cost management.

• Planned facility expansion and acquisition earn-outs were intended to be funded from internal capital.