<PAGE>
FOR IMMEDIATE RELEASE
---------------------
Contact: Sridhar Ramasubbu
Wipro
408-557-4402
- or -
James P. Prout
Taylor Rafferty
212-889-4350
WIPRO RECORDS 125% NET INCOME GROWTH FOR THIRD FISCAL QUARTER ENDED DECEMBER 31,
--------------------------------------------------------------------------------
2000/1
-----
Bangalore, India and Santa Clara, California -- January 18, 2001 -- Wipro
Limited (NYSE:WIT) today announced financial results under US GAAP for its
fiscal third quarter and the nine months ended December 31, 2000.
Highlights:
. Net Income for third quarter totaled Rs.1.8 billion ($39 million)
representing an increase of 125% over corresponding period in last
year.1
. Global IT Services revenue increased 80% for the quarter ended
December 31, 2000, at Rs. 4.8 billion ($102 million) and EBIT growth
of 105%.
. R&D Services contributed 50% of total revenue for the third fiscal
quarter, representing an increase of 3% up from 47% during the
corresponding period last year.
. 64% of total revenue came from North America, 28% from Europe and 7%
from Japan with the balance coming from the rest of the world.
. Growth in Services-based income in the Indian Services and Products
business segment drove EBIT from 6% to 11% for the third fiscal
quarter ended December 31, 2000.
. Rs. 3.6 billion ($78 million) cash generated from operations for the
nine-month period ended December 31, 2000.
Total revenues for the quarter ended December 31, 2000 were Rs. 7.5 billion
($160 million), up 25% over the quarter ended December 31, 1999. Net income for
the quarter ended December 31, 2000 was Rs. 1.8 billion ($39 million),
representing an increase of 125% over the same quarter last year.1 Earnings per
share was Rs. 7.96 ($0.17) for the quarter, representing an increase of 122%
over the quarter ended December 31, 1999.
-------------------
1/ Excluding a one-time gain of Rs.412 million ($ 9 million) resulting from the
issuance of stock by affiliate Wipro Net Ltd. to a minority shareholder. This
one-time gain is comprised of an increase in the carrying value of
investments in Wipro Net Ltd. of Rs.266 million ($ 6 million), and partial sale
of our stake in Wipro Net Ltd. resulting in a gain of Rs. 146 million
($3 million) pursuant to a joint venture agreement.
-more-
<PAGE>
-2-
Total revenues for the nine months ended December 31, 2000 were Rs. 21.5 billion
($460 million), representing a 34% increase over the corresponding period in the
last year. Net income was Rs. 4.35 billion ($93 million) representing an
increase of 136% over net income for the same period last year.1 Earnings per
share was Rs. 19.02 ($0.41) for the nine months ended December 31, 2000,
representing an increase of 135% over the earnings per share of Rs. 8.10 for the
corresponding period last year./1
Azim Premji, Chairman of Wipro, commented on the results: "We are closely
watching the growing global concerns about an economic slowdown in the US. Our
outlook on the demand for R&D and IT Services has not changed in the last
quarter. We see the slowdown in the US economy as an opportunity for Indian
Service Providers to convert outsourcing by US Companies into offshore sourcing.
This should benefit the ultimate consumer. Our established base in Europe and
Japan will help us leverage the growth in these markets."
Global IT Services (64% of Revenues and 83% of Operating Income)
Wipro's Global IT Services business segment recorded revenue of Rs. 4.8 billion
($102 million) for the quarter ended December 31, 2000, representing an increase
of 80% over the revenue for the quarter ended December 31, 1999. Earnings
before Interest and Tax (EBIT) was Rs. 1.6 billion ($35 million) for the
quarter, corresponding to an increase of 105% over EBIT for the same quarter
last year.
EBIT increased from 30% for the quarter ended December 31, 1999 to 34% for the
quarter ended December 31, 2000. This growth resulted from a higher proportion
of revenues coming from R&D Services, which increased from 47% to 50%, and an
increase in billing rates per professional by 17%, which was partially offset by
lower utilization of professionals by 2% and increase in compensation costs.
Clients with annualized billings in excess of one million dollars increased from
65 for the quarter ended September 30, 2000 to 67 for the quarter ended December
31, 2000. Our largest customer, top 5 and top 10 customers accounted for 8%,
29% and 44% of our total revenue for the quarter ended December 31, 2000,
respectively. Twenty-six new clients were added in the quarter ended December
31, 2000, and 82 in the nine-month period ended December 31, 2000. New clients
contributed 10% of total revenues in the quarter.
North America, Europe and Japan contributed 64%, 28% and 7% of total revenue in
the quarter, respectively, with the balance coming from the rest of the world.
We had 9490 employees as of December 31, 2000. We added 912 employees in the
quarter and 2843 professionals in the nine-month period ended December 31,
2000.
Indian IT Services and Products (21% of Revenue and 9% of Operating Income)
Wipro's Indian IT Services and Products business segment (Wipro Infotech)
recorded revenue of Rs. 1.6 billion ($34 million) for the quarter ended December
31, 2000. EBIT increased to Rs. 172 million ($4 million) in the quarter, up
from Rs.118 million in the same quarter last year.
-more-
<PAGE>
-3-
The services component of Wipro's Indian IT Services and Products business
segment was the driver of EBIT growth in the quarter. Revenue from the services
component increased to 23% of total revenues for the Indian IT Services and
Products business segment, representing an increase of 5% from 18% in the
corresponding period last year. Return on Capital Employed (ROCE) annualized
was 90% for the nine months ended December 31, 2000.
Wipro Infotech won the Golden Peacock Innovative Service Award for Effective
Service Delivery using state-of-the-art technology. The award will be presented
in the inaugural session of the World Congress on Total Quality 2001 on January
20, 2001. The Golden Peacock Service Award is designed to reward dissemination
of leading-edge concepts and international expertise to redefine quality and the
role of innovation to meet the challenges of the 21st century.
Consumer Care & Lighting (11% of Revenue and 5% of Operating Income)
Wipro's Consumer Care & Lighting business segment recorded revenue of Rs. 852
million ($18 million) for the quarter ended December 31, 2000, representing an
increase of Rs.12 million ($0.25 million) over revenue in the same quarter last
year. Earnings Before Interest and Tax (EBIT) was Rs. 109 million ($2.3
million) for the quarter ended December 31, 2000. Return on Capital Employed
(ROCE) was 44% for the nine months ended December 31, 2000.
The Board of Directors of Wipro Limited accepted the early retirement of Mr.
Arun Thiagarajan, Vice Chairman, from the Board of Directors of Wipro and
commended the contribution made by him.
Wipro Limited results computed under the Indian GAAP, along with individual
business segment reports, are available in the Investor Relations section at
www.wipro.com.
-------------
About Wipro Limited:
Wipro Limited is the first SEI CMM Level 5 certified IT Services company
globally. Wipro provides Research and Development services to Telecom and
Electronic product companies and software solutions to global corporate
enterprises.
In the Indian market, Wipro is a leader in providing IT solutions and services
for the corporate segment in India offering system integration, network
integration and IT services. Wipro also has profitable presence in niche market
segments of consumer products and lighting.
Wipro's ADSs are listed on the New York Stock Exchange, and its equity shares
are listed in India on the Stock Exchange - Mumbai, and the National Stock
Exchange, among others.
For more information, please visit our websites at www.wipro.com and
-------------
www.wiproindia.com.
------------------
-more-
<PAGE>
-4-
Forward-looking and cautionary statements
Certain statements in this release concerning our future growth prospects are
forward-looking statements which involve a number of risks and uncertainties
that could cause actual results to differ materially from those in such forward-
looking statements. The risks and uncertainties relating to these statements
include, but are not limited to, risks and uncertainties regarding fluctuations
in earnings, our ability to manage growth, intense competition in IT services
including those factors which may affect our cost advantage, wage increases in
India, our ability to attract and retain highly skilled professionals, time and
cost overruns on fixed-price, fixed-time frame contracts, client concentration,
restrictions on immigration, our ability to manage our international operations,
reduced demand for technology in our key focus areas, disruptions in
telecommunication networks, our ability to successfully complete and integrate
potential acquisitions, liability for damages on our service contracts, the
success of the companies in which Wipro has made strategic investments,
withdrawal of fiscal governmental incentives, political instability, legal
restrictions on raising capital or acquiring companies outside India,
unauthorized use of our intellectual property and general economic conditions
affecting our industry. Additional risks that could affect our future operating
results are more fully described in our filings with the United States
Securities and Exchange Commission. These filings are available at www.sec.gov.
-----------
Wipro may, from time to time, make additional written and oral forward-looking
statements, including statements contained in the company's filings with the
Securities and Exchange Commission and our reports to shareholders. Wipro does
not undertake to update any forward-looking statement that may be made from time
to time by or on behalf of the company.
# # #
(tables to follow)
-more-
<PAGE>
-5-
WIPRO LIMITED
CONSOLIDATED STATEMENTS OF INCOME
(in Rs. millions, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Year ended
December 31, December 31, March 31
------------------------ -------------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
1999 2000 2000 1999 2000 2000 2000
---- ---- ---- ---- ---- ---- ----
(unaudited) (unaudited)
Revenues :
Global IT Services.............................. 2,652 4,777 $ 102 7,245 12,531 $ 268 10,206
Indian IT Services and products.................
Indian IT Services.............................. 377 361 8 1,029 1,213 26 1,423
Indian IT Products............................. 1,750 1,224 26 4,575 4,521 97 6,758
Consumer Care and Lighting...................... 841 852 18 2,361 2,424 52 3,223
Others.......................................... 356 279 6 787 814 17 1,381
------- ----- --- ------ ----- ---- -----
Total................................... 5,976 7,493 $ 160 15,997 21,503 $ 460 22,991
Cost of revenues :
Global IT Services.............................. 1,316 2,466 53 4,482 6,605 141 6,174
Indian IT Services and Products.................
Indian IT Services.............................. 165 120 3 443 463 10 609
Indian IT Products............................... 1,548 888 19 3,788 3,569 76 5,574
Consumer Care and Lighting....................... 528 580 12 1,688 1,680 36 2,251
Others........................................... 217 157 3 579 557 12 1,070
------- ----- --- ------ ----- ---- -----
Total................................... 3,774 4,211 90 10,980 12,874 275 15,678
------- ----- --- ------ ----- ---- -----
Gross profit 2,202 3,282 70 5,017 8,630 185 7,313
Operating expenses :
Selling, general, and administrative
expenses.................................................. 1,242 1,375 29 2,846 3,915 84 3,821
------- ----- --- ------ ----- ---- -----
Operating Income.......................................... 960 1,907 41 2,171 4,715 101 3,492
------- ----- --- ------ ----- ---- -----
Gain/(loss)on sale of stock of affiliates,
Including direct issue of stock by affiliate.............. 412 412 412
Other income/(expense), net............................... (16) 208 4 (76) 237 5 (155)
Income taxes.............................................. (186) (299) (6) (335) (627) (13) (525)
------- ----- --- ------ ----- ---- -----
Income before share of equity in earnings
of affiliates and minority interest....................... 1,170 1,816 39 2,172 4,325 93 3,224
------- ----- --- ------ ----- ---- -----
Equity in earnings of affiliates.......................... 58 18 88 27 - 113
Minority interest......................................... - - (4) - (4)
------- ----- --- ------ ----- ---- -----
Income from continuing operations 1,228 1,835 39 2,256 4,352 93 3,333
Income tax benefit on sale of 50% interest in
discontinued operations................................. 219 219 219
------- ----- --- ------ ----- ---- -----
Net income...................................... 1,447 1,835 $ 39 2,475 4,352 $ 93 3,552
======= ===== ===== ====== ===== ===== ======
Earnings per equity share: Basic
Continuing Operations.............................. 5.39 7.96 0.17 9.91 19.02 0.41 14.63
Discontinued operations............................ 0.96 0.96 0.96
Net income........................................ 6.35 7.96 0.17 10.87 19.02 0.41 15.59
Earnings per equity share: Diluted
Continuing operations.............................. 5.39 7.89 0.17 9.90 18.87 0.41 14.58
Discontinued Operations............................ 0.96 0.96 0.96
Net Income......................................... 6.35 7.89 0.17 10.86 18.87 0.41 15.54
===========================================================================================================================
Additional Information
Operating Income
-------------------------------------------------------------
Global IT Services........................................ 800 1,637 35 1,896 4,155 89 2,894
Indian IT Services & Products............................. 118 172 4 265 416 9 435
Consumer Care & Lighting.................................. 110 109 2 316 266 6 479
Others.................................................... (29) 66 1 (112) 14 (36)
Reconciling Item.......................................... (39) (77) (1) (194) (136) (3) (280)
------- ----- --- ------ ----- ---- -----
Total..................................................... 960 1,907 41 2,171 4,715 101 3,492
------- ----- --- ------ ----- ---- -----
===========================================================================================================================
</TABLE>
<PAGE>
-6-
WIPRO LIMITED
CONSOLIDATED BALANCE SHEETS
---------------------------
(in Rs. Millions, except share data and unless stated otherwise)
<TABLE>
<CAPTION>
Nine Months Ended December 31, As of March 31,
------------------------------ ---------------
<S> <C> <C> <C> <C>
1999 2000 2000 2000
---- ---- ---- ----
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents..................... 522 5,761 $ 123 784
Accounts receivable, net of allowances........ 4,074 5,383 115 4,431
Inventories................................... 1,512 1,170 25 1,215
Deferred income taxes......................... 44 224 5 12
Other current assets.......................... 967 1,752 38 981
-------- -------- ------ --------
Total current assets.................... 7,119 14,290 306 7,423
-------- -------- ------ --------
Investment securities.............................. 379 1,324 28 297
Property, plant and equipment, net................. 3,463 5,383 115 3,604
Investments in affiliates.......................... 681 645 14 705
Deferred income taxes.............................. 374 70 2 256
Intangible assets, net............................. 20 985 21 11
Other assets....................................... 277 532 11 382
-------- -------- ------ --------
Total assets 12,313 23,229 497 12,678
======== ======== ====== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Borrowings from banks......................... 1,167 8 - 93
Current portion of long term debt............. 242 1,362 29 1,250
Accounts Payable.............................. 1,870 1,435 31 1,388
Accrued expenses.............................. 1,108 1,867 40 1,490
Advances from customers....................... 524 715 15 755
Other current liabilities..................... 563 760 16 435
Redeemable preferred stock.................... 269 250
-------- -------- ------ --------
Total current liabilities................ 5,743 6,147 131 5,661
-------- -------- ------ --------
Long-term debt, excluding current portion.......... 1343 120 3 211
Deferred income taxes.............................. 74 9 - 18
Other liabilities.................................. 42 44 1 102
-------- -------- ------ --------
Total liabilities 7,202 6,320 135 5,992
-------- -------- ------ --------
Stockholders' equity
Equity shares at Rs. 2 par value: 235,000,000 shares
authorized as of December 31, 1999 and March 31, 2000
and 375,000,000 shares authorized as of December 31,
2000; Issued and outstanding : 229,156,350 shares
as of March 31, 2000 and December 31, 1999 and
232,391,814shares as of December 31, 2000......... 458 465 10 458
Additional paid-in capital......................... 394 6,665 143 800
Deferred stock compensation........................ (302) (133) (3) (209)
Accumulated other comprehensive income............. 2 1 2
Retained earnings.................................. 4,559 9,911 212 5,635
Equity shares held by a controlled Trust:, 1,216,460,
1,263,510 and 1,272,785 shares as of March 31,2000,
December 31,1999 and December 31, 2000............ * * * *
-------- -------- ------ --------
Total stockholders' equity 5,111 16,909 362 6,686
-------- -------- ------ --------
Total liabilities and stockholders' equity 12,313 23,229 497 12,678
======== ======== ====== ========
* Equity shares held by a controlled trust Rs. 69,500 Rs. 74,900 Rs. 74,900
</TABLE>
# # #