Wipro (WIPRO) Q4 97/98 earnings summary

Executive summary

• FY98 consolidated sales and other income rose 13% to Rs.18,269m; PAT after minority interest increased 43% to Rs.1,005m. Standalone sales were Rs.15,003m and PAT Rs.1,078m.

• Software exports grew 49% to Rs.4,070m; India-developed software services grew 85%, while financial-services weakness and low infrastructure investment weighed on infrastructure technology profits.

• The strategy emphasized quality, customer service, brand investment, R&D and growth across IT, consumer, healthcare and infrastructure businesses.

Financial highlights

• Consolidated gross sales and other income were Rs.18,269m, up 13% YoY; PBT was Rs.1,118m and PAT net of minority interest was Rs.1,005m, up 43%.

• Standalone sales were Rs.15,003m, up 15%; PAT was Rs.1,078m, up 87%. Exports totaled Rs.4,179m, up 44.2%.

• Standalone extraordinary/prior-period items reduced profit by Rs.222m; reported profit for the year was Rs.856m.

• Consolidated PBDIT was Rs.2,039m and PBIT Rs.1,592m; reported PAT reflects restructuring/prior-period charges of Rs.582m.

Outlook and guidance

• Addressable markets were expected to grow 25% p.a. over the next three years; planned FY99 after-market and services revenue was Rs.8,900m, including exports of Rs.7,300m and software exports of Rs.7,000m.

• Planned FY99 capital investment was Rs.2,000m, with 70% for software; R&D investment was planned at Rs.350m, and employee training and development spend at Rs.126m.

• FY99 staffing targets were 9,000 employees, including over 5,600 software professionals; infrastructure technology services were expected to grow with improved profitability.

• Six Sigma coverage was targeted for most key processes by 2002; the program was in its second year with 100 projects and 27 facilitators.