Half Year 2021 Wipro Ltd Earnings Call

As we've explained too earlier to survive a response required a very severe response and costs we had to cut.

87% and total cost this is really on payroll and rental.

And Oh, so happy to report that on in most cases now the rental deals have been renegotiated.

ER to note include building block down and mostly on a variable basis as a percentage of revenue.

Coming out of Lockdown, so to March 31st of next year.

We have rental agreements in place that will not be a burden on cost and would it be in sync with the relatively.

I would say that the pickup in demand to be in sync with the demand for construction.

Appeared on of course, we've had to be also once again fairly severe.

The debt is a permanent amount of Ah Ah.

Of of reconfiguration that has been done so as these restaurants are coming on regular rising and coming out of that locked down periods.

The number of people involved in the front of the house and the back of the house and the housekeeping had been reduced so we do expect some permanent.

Or cost reductions to continue this has been done through an exercise of.

End up in Seattle, based budgeting exercise and each restaurant.

In terms of liquidity, so far the company has adequate cash and we'll be tapping in the line that all that somebody stuff into which is a government guaranteed line as a percentage of their existing lines.

No John is working on some confusion disk.

This company will require some capital in the salary bucket. Additionally, two to 3 million.

That we will provide up the right thing.

At the same time it does have a type bucket, which is just have started working on.

As you can guess thrive in the restaurant business currently is basically oriented towards takeout and delivery.

The company has already had a trial of a one significant to vertical in delivery, which is the pizza vertical and they have a brand called slice and sell Y C E.

And that would be well enough the cornerstones of online the second one is.

It's called butter delivery, which is really Indian food, the basic and improved.

The attempt is to reduce the you know the current offering from the restaurants is at a higher average order value. It's you know, it's all feel dopey 800000 rupees, if one were to order and.

And the online delivery market currently has an average it'll be up about 200 to do so we have to reconfigure.

And create brands at the right it'll be and promote them. So that's the effort that the company is doing as we speak and.

And as things pick up but we think that you know what to say, let's say so we are seeing it already is that post.

Our corporate normalization there.

The number of restaurants in the market are going to be fewer so I think with a better cost structure and with less competition there.

There will be a.

A good capability to further increase the focal network and we think that that's where we will want to start out efforts, both locally as well as internationally.

With that I'm going to the question Ron to take on education initiatives on page 19.

Thanks Sanjay.

So in in <unk> the are called it impact assessment remains low over the last time, we spoke.

Our existing contracts with schools is resilient, so our renewal rates.

Our according to plan what has been affected as new sales because of the delay in schools reopening as we discussed when he spoke about sports village.

International Inc. International schools, as we discussed in the Middle East have.

Have reopened in September and our international sales is currently trending on plan. Our large scale education projects are are currently trending ahead of plan. There just in general a very strong tailwind for deck adoption across the board both with car.

It's what schools.

You know our corporate partners for large scale education projects as.

As well as in the B to C market with their parents and students are willing to pay.

To adopt and tech.

And in line with that in addition to our our cost Cox and configuring our cost structure.

In line with lower revenue levels, we have in fact doubled down on product development to exploit this strong momentum and tailwind getting an attack.

I'm happy to note that you know.

Our balance sheet remains strong of 950 million rupees of cash zero debt. So.

Would it be and balance sheet strength.

We remain strong in that bucket.

Happy to not share.

Share two things one is that we've made to a very significant cxo hires to Colby Weve, Ida CFO and recently hired.

Let's see here.

The CTO comes from an acceleration bed Bath.

Venture so comes with a very strong b to C mindset, we treat.

Which we believe important as we create.

Create new revenue initiatives to exploit the strong tailwind getting an attack.

Through called it the company has launched three new initiatives or we'd entered light tutoring in mind spark and we've created a new assessment product called aspect. So put that which is that that the children take every week and we've also taken our gifted education program online.

Well with a lot of success with high.

With high net promoter scores of students and those those online programs have been well appreciate it.

I knew our new revenue initiatives are currently at a run rate of $10 million a month 10 million rupees a month. So we recently entered a million dollar annual drop and we expect this to.

Could double by time be clear Mark in this fad.

In this fad.

With that I'll hand over on slide 22.

Thank you Ron Thank you Angie I've been up.

Let me conclude with this slide I think it's an extremely important slide.

Our previous fund fund two was deployed only to the extent of 85% because we ran two to crisis one at the beginning when at the end or beginning with a G.S.C.D.N. was taper tantrum.

But this time or you know in the first major crisis of this fund.

Oh, we have persevered through Corbett to ensure that the funding 100% deployed.

We've we've shared with you one investment and we will shortly share with you. The second investment is committed to do deals before September.

And he will be a growing capital for one of these whichever consummate focused.

And the reason so at the beginning of call. It I think it's important to say that in March we were 70% drawn.

And you are about to consummate novvi being drawn down capital for Novvi and not be run into unfortunate heavy better.

And that was going to take us to 85% and 15% plus set aside as result for the existing portfolio.

Well, maybe we'll end up by the end of October is 95%.

In 10 investment.

And the 5% set aside for companies.

No actually we will reach the 100% number a year ahead of our original plan.

Original plan was to reach 100% by the end of <unk>.

ER by September of next year, because companies drug existing companies would have drawn down capital much slower.

So from an investment fund we've now made this a 10 investment fund, but the objective of ensuring a faster drawdown and a complete deployment.

So with this and I think it also is a testament to the operating capability of the team.

As to how I think without our survival response.

Or we would have possibly consumed another 5% to 10% of this fund inside our company I think it's a very significant statement I'm, making.

But if he had not implemented the survive response across our eight companies, we would have consumed between 5% to 10% additional capital inside these companies.

Variety of measures.

And some of these are permanent gains.

Save that capital and today. This capital. This this portfolio. Therefore is I would say in good shape we're on.

We are on track to deliver 90% of our pre covert goal.

Our our net dollar point because it has been affected only to the extent of 10%.

And faster deployment.

Then we will have a 10 investment portfolio.

And or will be will be 95 plus percent deployed by.

By the end of October so.

With the with this I will I'll stop at 724, India time.

And I'll hand, this back to for Exone.

To check if any of you have questions.

Thank you very much.

We will now begin the question and answer session.

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The first question is from the line of amid Thomas from Etch. Good capital. Please go ahead.

Yeah, Hi to cheat I think cushion on the expected ideal scenario day, and you mentioned that a finders sales part of that stake at around 24%.

Great into and money multiple for the extra day portion.

Yes.

So I mean, we are selling.

About.

28% of a holding but 17 like shares.

That was what we had bought in the first tranche.

And this would be roughly a multiple of about two point fivex and slightly less than four years.

Sorry, I missed that or how many how much actually yes point fivex.

Slightly less than four years just to portfolios.

Okay, Let's talk about your question you wanted them or multiple yes, you're stuck or should I guess.

Thank you.

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That's true from BTG. Please go ahead.

I think we'll find haggen.

I hope you're all keeping well good question onshore on sportswear lunch in line you mentioned that you know the balance sheet has been well taken care of this cash to the tune of 45 stores.

50 million therapies for anyone else what is.

Just wanted to check if the financials are not what we're not sure that I I hope, they're still profitable, but it's not what is the cash run like and whats the cash unreal.

So far on the total.

The total cash that they will consume in financially our 21 will be about a million dollars a little over $1 million.

And be might we might elect to spend a little more on again digital initiatives. So that we get a stronger growth in that like we need to let the cash requirement will be seven and a half cards about a million dollars.

And just to kind of remind you. This is not over and above the 45 crores. So this was a substantially well capitalized business and.

As Ron mentioned I think through the.

Second reduction in direct as well as corporate expenses, we've basically.

In short that there's no transmission off.

Go ahead to the balance sheet so.

So the capital that was on the balance sheet to fuel growth. If you will M&A, we'll still have that cash pile on the balance sheet to keep growing investing in growth initiatives and to do operate and to do M&A.

Understood. Thanks, maybe one more could you just give us a sense of the same function Buchan mall sales as well in terms of how much cash that is what kind of numbers you have given that I expect both of these businesses on sort of the unprofitable in the state.

Yep.

So the total.

Planning for an EBITDA.

Loss of about $2.2 million in massive.

And a about a 1.5 in the teamwork.

So this this would be the cash loss that is being planned.

Based on a certain demand profile by the way I must say that most of the demand that has come about year to date is actually a little higher than our demand profile and the same wasn't the case of jumbo, but you know it's just for the cash calculations are sticking to a slightly conservative dimont preferred.

Alright, Thanks, I get canned goods for the slightly better performance on losses, but content.

Although.

Hope your views that recently.

Uh huh.

And Mr., there's an automatic thank you no. Thank you.

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As on high this is global I think or we can call time on this call.

Hello, Hi, yourself I think.

I think let's let's call time on this call will be we'll be back in 45 days for our six.

Update call in this call that cities.

So very soon we'll be back for more questions. If any and of course, we are available. Meanwhile, if there are any bespoke enquiries.

All questions.

Thank you so much on the fuel we had a full house.

And so really really appreciate.

You know you're participating and I'd like to also report that.

You know the team has been substantially save one of our team members, who is working from home and Jay for.

Got Kuwait shoe bomb is while the younger members of our team a fortune.

Fortunately he's recovered is and he's he's I can tell you that he is back to playing squash. So yes. It does seem to have fully recovered.

Alan.

Other than that Fortunately the team has been safe we are our offices offices have been on.

And some of us.

Any given date, 20% to 30% in the office and rest from home.

Our portfolio companies are almost entirely operational across the board so with that thank you once again this.

This is on behalf of the entire Gudger Dean and also my partners Reggie the Enron and I've been out on this call with me look forward.

Look forward to being in touch with you and thank you for being such an excellent host. Thank you all.

Thank you Harold Thanks.

Ladies and gentlemen on behalf of the Jack Apple that concludes this conference.

Thank you for joining us and you may now disconnect your lines.