Business context and reporting period
Wipro Limited filed this Form 20-F annual report for the fiscal year ended March 31, 2022. Although the request metadata refers to “2021 Q4,” the filing reports full-year FY2022 results, not a standalone quarter. Wipro is a global IT services, consulting and business-process services company. Financial statements are prepared under IFRS and presented in Indian rupees; figures below are generally ₹ millions.
Financial performance and position
| Metric | FY2022 | FY2021 | Change |
|---|---|---|---|
| Revenue, income statement basis | 790,934 | 619,430 | +27.7% |
| Operating income | 140,286 | 123,053 | +14.0% |
| Profit for the year | 122,329 | 108,662 | +12.6% |
| Profit attributable to equity holders | 122,191 | 107,946 | +13.2% |
| Basic earnings per share | ₹22.35 | ₹19.11 | |
| Cash generated from operating activities | 110,797 | 147,550 | −24.9% |
The MD&A also reports segment revenue of ₹795,289 for FY2022 versus ₹622,425 for FY2021; this presentation includes foreign-exchange effects and differs from revenue in the consolidated income statement. On the segment-reporting basis, gross margin was 30.02% and operating margin was 17.59%, down 199 and 218 basis points, respectively. IT Services generated 98.3% of segment revenue; its gross margin was 30.41% and segment-results margin was 17.74%, down 218 and 254 basis points.
Cash and cash equivalents were ₹103,836 at March 31, 2022, and current investments were ₹241,655. Wipro reported ₹345,491 of cash, cash equivalents and short-term investments, and ₹193,795 net of loans and borrowings, down from ₹262,168 a year earlier. Loans, borrowings and bank overdrafts totaled ₹151,696; lease liabilities were ₹24,233. Available but unused credit lines were reported at ₹56,685, subject to lender consent and covenant compliance. Total assets were ₹1,079,182 and total equity ₹658,673.
Material changes versus the prior year
- IT Services revenue increased 29.05% to ₹781,824, reflecting stronger client demand, new deal ramp-ups, acquisitions including Capco, and rupee depreciation against several currencies.
- IT Products revenue fell 19.67% to ₹6,173, and ISRE revenue fell 18.14% to ₹7,295. Wipro attributed the declines primarily to its selective approach to systems-integration bids and, for ISRE, completion of large projects in the prior year.
- Cost of revenue rose 31.35% to ₹555,872, faster than revenue. Employee compensation, subcontracting, facilities and acquisition-related costs contributed to lower margins.
- Operating cash flow declined as working-capital needs increased. Growth in trade receivables, unbilled receivables and contract assets reduced operating cash generation by ₹43,229.
- Investing activities used ₹224,495, including ₹129,846 for acquisitions and ₹20,153 for property, plant and equipment. Financing activities generated ₹46,586, including net borrowing inflows.
- Loans and borrowings increased during the year, including issuance of US$750 million of 1.50% senior unsecured notes due June 2026.
Outlook, commentary and risks
The filing provides no specific consolidated revenue or earnings guidance. Management described strong demand for digital transformation, cloud, cybersecurity, data and AI services, and reported FY2022 large-deal total contract value of US$2.3 billion and annual-contract-value order-booking growth of 30%. The top five and top ten IT Services clients grew 31.5% and 30.5%, respectively. Management nevertheless cautioned that significant gross-margin improvement may be difficult amid wage inflation, hiring and training costs, subcontracting, acquisition mix, onshore delivery, currency movements and pricing limits.
Acquisitions completed during FY2022 included Capco, Ampion, Edgile and LeanSwift. Goodwill rose to ₹246,989 from ₹139,127, largely due to acquisitions; the company reported no goodwill impairment at year-end. CAS Group and Rizing were acquired after year-end. FY2022 other operating income included ₹1,233 from the fair-value change in callable units related to the hosted data-center business sale and ₹953 gain from the Denim Group investment sale.
The Board declared interim dividends of ₹1 and ₹5 per share for FY2022; the ₹5 dividend was paid after year-end. The Board recommended adopting the aggregate ₹6 per share as the final dividend. Wipro states a capital-allocation policy targeting payout of at least 45%–50% of trailing three-year net income, subject to applicable approvals and conditions.
Key risks include sustained wage and talent pressures; client spending, concentration and contract termination; cybersecurity, privacy and data-transfer compliance; foreign-exchange and interest-rate movements; acquisition integration and goodwill impairment; and COVID-19-related operating and client impacts. Tax authorities’ disputed income-tax claims totaled ₹92,476 at March 31, 2022 and were not recognized as debt; management expects its position to be upheld, but outcomes remain uncertain. The auditor issued an unqualified opinion on the IFRS financial statements and on internal control over financial reporting; management also concluded disclosure controls were effective.
Important facts for investors to verify
- Reconcile reported income-statement revenue of ₹790,934 with segment revenue of ₹795,289, including the foreign-exchange presentation.
- Track whether operating cash flow recovers as receivables, unbilled receivables and contract assets grow, and whether reported margin pressure persists.
- Review acquisition integration, Capco’s contribution, acquisition-related goodwill and intangible assets, and the funding and subsequent performance of CAS Group and Rizing.
- Assess debt maturities, borrowing costs, covenant-dependent credit lines and liquidity after acquisitions and dividends.
- Monitor the ₹92,476 disputed tax claims, other contingencies, and changes in tax incentives or effective tax rates.
- Confirm the final dividend approval and payment, and distinguish the full-year annual report from any separate quarterly results.