Wipro (WIPRO) Q4 98/99 earnings summary

Executive summary

• FY99 Wipro Limited sales and other income rose 31% to Rs 18,040m; PAT before non-recurring items increased 58% to Rs 1,702m.

• Wipro Corporation revenue rose 30% to Rs 21,581m; PAT, net of minority interest, rose 56% to Rs 1,561m before a non-recurring Wipro Finance charge.

• Growth was led by software exports, while Systems and Services and Consumer Care and Lighting also expanded; Wipro Finance recorded substantial provisioning and losses.

Financial highlights

• Wipro Limited sales and other income were Rs 18,040m versus Rs 13,801m; PBT Rs 1,764m versus Rs 1,118m; PAT before one-time items Rs 1,702m versus Rs 1,079m.

• Reported profit for the year was Rs 1,121m after Rs 580.9m in non-recurring/prior-period items, primarily the provision for diminution in Wipro Finance investments.

• Corporation revenue was Rs 21,581m, up 30%; PAT net of minority interest was Rs 1,561m, up 56%, before a Rs 503m non-recurring Wipro Finance charge.

• Exports from Wipro Limited reached Rs 6,325m, up 61%; foreign exchange earnings were Rs 6,525m versus Rs 4,179m.

Outlook and guidance

• Software and Services were targeted to reach 40% of Wipro Limited sales in FY00, versus 35% in FY99; capacity-creating investment was to focus primarily on this business.

• Management expected growth and profitability in all divisions in FY00 and planned stronger international sales leadership, account development, fixed-price contract wins, training, R&D and brand investment.

• Six Sigma savings were expected to rise from Rs 44m in FY99 to Rs 155m in FY00, with quality investment held at Rs 30m; four-sigma process performance was targeted by March 2000.