CIA-1 (Financial Management)

Evaluation and Analysis of

Financial Instruments Used by
WIPRO & Larsen & Toubro for
the last 10 years

Group Members:
Bhavya Garg (1920236)
Vanessa Johnson(1920252)
Harish S Kumar (1920271)
Adjanado Serge Kekeli
(1920277)
Raghav Vacher (1920222)
Contents

1. Background of Companies

2. WIPRO’s Evaluation & Analysis

3. Larsen & Toubro’s Evaluation & Analysis

Wipro Company Profile

Introduction

Wipro Limited is a market leading Information Technology,

consulting and business process services company. Wipro
utilizes the power of analytics, robotics, cloud and other
emerging technologies to help clients spread across six
different continents to adapt to the current digital trend and
help them thrive to success. Wipro has over 1,60,000 dedicated employees serving together
and building a bold and new future. The amount of revenue generated by Wipro in the financial
year 2017 is 848 crores USD.

Wipro History

Wipro Limited, also known as Western India Products Limited is an Indian information
technology company established by Mohamed Hashem Premji as 'Western India Vegetable
Products Limited' in 1945 which was later abbreviated to Wipro. It was previously set up as
a refined edible oil manufacturer in Amalner, Maharashtra. After Mohamed Premji's death in
1966 his son Azim Premji took charge of the company at a young age of 21. The year 1980
marked the arrival of Wipro in the Information Technology domain.

Wipro Organization Heads

1) Azim Premji is the chairman of Wipro Limited.

2) Abidali Neemuchwala is the CEO of Wipro.

3) Rishad Premji is the Chief strategy officer in Wipro.

Wipro's Vision

"To earn our clients' trust and maximize the value of their business by providing solutions that
integrate deep industry insights, leading technologies and best in class delivery process."

Headquarters of the company

Bangalore, Karnataka, India

Wipro Tagline

Wipro previously had a tagline " Applying thought" from (1998-2017) but now it has been
retired.

In 2017 Wipro Launched New Logo for new brand identity and rearticulated "Spirit of Wipro"
to underscore wipro's commitment to transformation & evolving client expectation.

Wipro follow below principles

1. Be passionate about client's success

2. Be global and responsible
3. Treat each person with respect
4. Unyielding integrity in everything we do

Awards and Recognition

● Wipro won the Quest Forum Global Sustainability Awards in the software category for
the year 2017.
● Wipro won the Most Admired Knowledge Enterprise (MAKE) Award for the year
2017.
● Wipro won the "Best Internet of Things Solution Partner Award" by Cisco.
 ● Wipro’s Next Generation Customer Experience (NGCE) platform won the “Best
Innovation Practices for Science and Technology Service Industry in China”
award.
● In the FTSE4Good Index Series in 2017, Wipro has been named a constituent.
● For the year 2017, Wipro was selected as a member of Vigeo Eiris Emerging Market
Sustainability Index (the 70 most advanced companies in the Emerging Market
Region).

Geographical Presence

Wipro is a global IT company currently present across 54 countries across the globe, offering
IT solutions and services which includes Systems Integration, Consulting, R&D Services,
Information Systems Outsourcing, IT-Enabled Services etc.

Wipro has presence across entire India

*East:

Kolkata, Guwahati, Bhubaneswar

*West:

Pune, Mumbai, Ahmedabad, Baroda

*North:

New Delhi, Noida, Gurugram, Jaipur

*South:

Bengaluru, Chennai,Hyderabad, Visakhapatnam, Coimbatore, Mysore, Secunderabad, Cochin,

Vijayawada
WIPRO
Sources of Funds & Growth Analysis

In the financial year of 2012 and 2013, we see a great dip especially towards the graph in the
long term borrowing and equity graph of Wipro ltd.as it reduced from 22,022 to 590. There are
several factors that contribute due to the sudden dip in the system but the main reason was that
the Company entered into an arrangement with a consortium of banks to obtain External
Commercial Borrowings (ECB) during the year ended March 31, 2008. Pursuant to this
arrangement, the Company has availed ECB of approximately 35 billion Yen repayable in full
in April 2013. The ECB carries an average interest rate of 1.94% p.a. The ECB is an unsecured
borrowing and the Company is subject to certain customary restrictions on additional
borrowings and quantum of payments for acquisitions in a financial year.
In the financial year of 01/04/2017-31/03/2018, Wipro made certain acquisitions in the
market due to which there was a sudden requirement & consequent increase in long-term
borrowings to make those acquisitions, which also lead to a decrease in the interest coverage
ratio.

The company saw a growth at the end of March 2019, as the company chose to fund its
growth through long term borrowings between April 2017- March 2018, hence the revenue
from operations increased by 8% and the net profit by 9%.

They realized ` 26,103 million from the sale of our hosted “Data Centre Services”. They
have used part of the proceeds to partially repay their long-term borrowings in some of their
acquisitions, hence a significant decrease in long-term borrowings in the financial year from
April 2018-March 2019.

It can also be seen the equity share capital remains stable till March 2017 and increases in
the financial year starting from April 2017 and goes on till the end of FY 19. However, between
April 2019 and March 2020, we can observe a slight decrease in the equity share capital which
can be noticed due to buy back of equity shares.

When the Debt Equity Ratio is observed for a period of 10 years, we observe the ratio has
somewhat stabilized over the years, from 0.22 it has fallen to 0.11, which means the ratio of
debt is lesser now and is closer to the equity share capital employed by the company.
The expected growth cycle for the future of the company goes through in regard to its equity
is as follows:

This is believed due to the crashing and recession of the economy due to a global pandemic
COVID-19 therefore the reduction in long borrowing and equity for 5 years and knowing the
company, they will reach a faster break even than the rest of the industry.

Larsen & Toubro – Corporate Profile

Larsen & Toubro is a USD 16 billion technology, engineering,

construction, manufacturing and services conglomerate, with global
operations. The Company is engaged in critical sectors - infrastructure,
construction, defence, hydrocarbon, heavy engineering, aerospace, power
(nuclear/ thermal/hydroelectric), shipbuilding, electrical & automation,
mining and metallurgy .

L&T was set up in 1938, and over seven decades, has built a reputation for quality, reliability
and strong customer orientation. The Company’s contribution to infrastructure, industry and
society is widely recognised. It has been described in the media as ‘the builder of the India of
the 21st Century’.

Integrated capabilities span the ‘design-to-deliver’ spectrum, enabling it to offer single-point

solutions across industries. Design facilities and technology centres in India and the Middle
East, are backed by manufacturing facilities in eight countries.

Global Presence

L&T’s network of offices spans the globe. It engages with leading international companies as
technology process licensors or consortium partners. The Company has established itself as a
major player in the infrastructure sector in the Middle East, with the successful execution of a
number of key projects. Its wholly-owned IT and technology service subsidiaries have
development and delivery centres in proximity to global clients. L&T’s products, including
high-tech process plant equipment, have been installed in over 30 countries including the US,
UK and China.

Products And Services

Construction, Construction & Mining Machinery, DefenceElectrical & Automation, Heavy
Engineering, Hydraulics,Hydrocarbon, Metallurgical & Material Handling, Power, Power
Development Limited, Rubber Processing Machinery, Shipbuilding, Valve

Corporate Sustainability

L&T was the first engineering & construction company in India to report its sustainability
performance. Annual Sustainability Reports highlight achievements across the traditional three
‘Ps’ of People, Planet, and Profits. Every aspect of L&T’s operations is characterized by
professionalism and high standards of corporate governance.

Green portfolio

L&T has retained its leadership edge by leveraging its entrenched competitive capabilities
while simultaneously remaining alert to emerging possibilities. We continued our engagement
with India’s strategic sectors as well as in critical areas such as infrastructure development. Our
existing capabilities are also in sync with national programmes like ‘Make in India’ and ‘Digital
India’.
L&T’s integrated capabilities span the spectrum of ‘design to deliver’ for infrastructure and
engineering solutions. However, L&T believes in inventing the wheel and leveraging new
technologies for a wider portfolio of green products. Characterised by professionalism, high
standards of corporate governance and sustainability, the Company has developed a Green
Products and Services Portfolio. With our Green Portfolio, we deliver engineering and design
solutions focused on sustainability and infrastructure with low environmental impact. These
include technology solutions with lower carbon emissions, less water consumption, lesser air
pollution, energy efficiency improvement, clean energy and resource conservation.

Recognition

L&T ranks among the top ten Most Respected Companies and #1 in the Infrastructure Sector
(Business World, Jan 2016). The Company won The Economic Times Corporate Citizen of the
Year Award - 2013. It was ranked 4th by Newsweek in the global list of green companies in the
Industrial sector. It has been consistently rated among the ‘Best Indian Brands’ by global brand
valuation agencies. A Business Today Survey ranked L&T in the Top 10 ‘Best Companies to
Work For’.

Highlights

- Construction of airports in Mumbai, New Delhi, Bangalore, Chandigarh, Hyderabad,

Cochin and at Salalah (Oman)
- Metro systems in leading Indian cities. L&T is currently building the Qatar Metro and
is a consortium partner for the construction of the Riyadh Metro.
- Offers integrated solutions for Smart Cities, with inputs from L&T Construction, L&T
Electrical & Automation, L&T Infotech and L&T Technology Services
- Technological support in the launch and tracking of India’s space missions to Mars and
the moon
- Building of India’s first nuclear powered submarine
- The world's largest coal gasifier made in India and exported to
China
- The world’s biggest Ethylene Oxide reactor for a petrochemical
complex in the Gulf
- The world’s largest Fluid Catalytic Converter regenerator for a
refinery
- Wide range of low and medium voltage switchgear
- Hydrocarbon projects executed in the Middle East, Africa, India and
South East Asia
- IT and technology solutions to clients worldwide
Larsen & Toubro

Capital Structure

Period Instrument --- CAPITAL (Rs. cr) --- -PAIDUP-

From To Authorised Issued Shares (nos) Face Value Capital

2018 2019 Equity Share 5000 1998.81 1998812360 10 1998.81

2017 2018 Equity Share 5000 1995.68 1995676960 10 1995.68

2016 2017 Equity Share 5000 1755.72 1755721861 10 1755.72

2015 2016 Equity Share 5000 1753.4 1753398551 10 1753.4

2014 2015 Equity Share 5000 1720.29 1720285900 10 1720.29

2013 2014 Equity Share 5000 1718.45 1718448975 10 1718.45

2012 2013 Equity Share 5000 1716.76 1716760532 10 1716.76

2011 2012 Equity Share 5000 1714.76 1714761612 10 1714.76

2010 2011 Equity Share 5000 1417.02 1417024000 10 1417.02

2009 2010 Equity Share 5000 1353.59 1353591591 10 1353.59

2008 2009 Equity Share 1500 2.05 2050000 10 2.05

Liquidity And Solvency

Ratios

Current Ratio 48.08 93.83 0.36 0.5 0.72 0.67 0.56 24.93 0.06 13.05

Quick Ratio 46.28 91.41 9.04 2.2 3.26 2.78 1.3 24.89 205.81 13.05

Debt Equity Ratio 0.29 0.2 0.55 0.47 0.54 0.47 0.42 -- 0.2 --

Long Term Debt 0.34 0.24 -- -- --

Equity Ratio 0.29 0.2 0.3 0.31 0.38

Debt Coverage Ratios

Interest Cover 2.5 2.81 6.34 14.59 7.42 3.98 5.74 7.11 1.63 --

Total Debt to Owners 0.19 0.21 -- 0.2 --

Fund 0.15 0.06 0.24 0.15 0.15
Financial Charges 3.98 5.75 7.11 1.63 113,629.
Coverage Ratio 2.51 2.81 6.34 14.6 7.43 74

Financial Charges 3.97 12.21 5.9 1.39 111,159.

Coverage Ratio Post 38
Tax 2.32 2.64 6.42 14.97 7.67
Financial Growth cycle of L&T

The major sources of finances for L&T have been through Security finance (equity and
debt) and Loan finances. The following paragraphs have a brief listing of the company
growth stages in terms of financial decisions/funding received (over a period of 10 years)

Crucial Financial stages of L&T:

● L&T majorly raised its funding through the capital markets after going public in the
year of 1950 with 20 lakh as paid up capital.
● May 2010 –L&T and Howden signed a joint venture to design engineer manufacture
and supply axial fans and air preheaters to Indian thermal power plants ranging
between 100 MW to 1200 MW. The joint venture will invest around Rs 100 crore for
setting up of the industrial facility and related infrastructure.
● 21 September 2015- Larsen & Toubro sold 8.52 crore equity shares of its subsidiary
L&T Finance Holdings representing 4.95% stake in the company on the National
Stock Exchange at Rs 70 per share.
● 31 March 2016 - L&T sold its entire 89% stake in L&T Infocity Limited to Ace
Urban Developers for a total consideration of Rs 191 crore.
● 15 July 2016- L&T sold equity shares by way of initial public offering by its
subsidiary L&T Technology Services. L&T sold up to 15% of the equity shares held
in L&T Technology Services through the offer
● 13 February 2017 -L&T formed a joint venture with MBDA, a world leader in
missile systems. After which, L&T will own 51% of the new joint venture company
with MBDA owning the remaining 49% stake
● Apr 20, 2020 –L&Tt has raised Rs 1,250 crore through issuance of non-convertible
debentures (NCDs). "The company has today issued and allotted 12,500 - 7.20 per
cent rated listed unsecured redeemable non-convertible debentures of Rs 10 lakh each
aggregating to Rs 1,250 crore which will mature on April 20, 2023
Loan funds (10 years)

2018-19 2017-18 2016- 2015- 2014- 2013- 2012- 2011- 2010- 2009-
17 16 15 14 13 12 11 10

1,25,555 1,07,524 93,954 88,135 90,571 80,330 62,672 47,150 32,798 22,656

Note- The denomination of the values given are in crores (INR) *

Given below is the funds raised in the capital market by L&T in the past 10
years (2008-2018/19)

Excel Sheets:

https://docs.google.com/spreadsheets/d/1bg92zD9ibKnznFZWwrJLe1QYPweTnn1Iamo5Rpe
mFjU/edit?usp=sharing

https://docs.google.com/spreadsheets/d/1oFuZ9bUgm4UXhS14EVuX7DBIZy-
pWkPbhuWa0JBXu_g/edit?usp=sharing
References:

https://www.larsentoubro.com/corporate/products-and-services/

https://www.conduiraonline.com/index.php/detail/1554-wipro-company-profile

https://www.wipro.com/content/dam/nexus/en/investor/annual-reports/2018-2019/annual-report-for-
fy-2018-19.pdf

https://www.wipro.com/content/dam/nexus/en/investor/quarterly-results/2019-2020/q4fy20/ifrs-
financials-mar-2020.pdf

https://www.moneycontrol.com/financials/wipro/consolidated-profit-lossVI/w/1#w

https://www.moneycontrol.com/financials/wipro/consolidated-balance-sheetVI/W/1#W

https://www.wipro.com/content/dam/nexus/en/investor/annual-reports/2017-2018/annual-report-for-
fy-2017-18.pdf

https://investors.larsentoubro.com/AnnualReports.aspx

https://economictimes.indiatimes.com/markets/bonds/lt-raises-rs-1250-crore-via-
ncds/articleshow/75256555.cms?from=mdr#:~:text=%22The%20company%20has%20today%20issue
d,said%20in%20a%20BSE

https://www.businesstoday.in/current/corporate/lt-market-cap-to-touch-rs-3-lakh-crore-in-five-years-
am-naik/story/348821.html

http://investors.larsentoubro.com/upload/AnnualRep/FY2019AnnualRepFull%20Annual%20Report%
202018-19.pdf