Wipro announces ₹11,000-cr share buyback; net dips

BENGALURU: Wipro Ltd on Thursday said its board had approved a ₹11,000 crore share buyback plan, the second in as many years by India’s third-largest IT services firm, which completed a ₹2,500 crore share buyback last year.

Wipro’s decision to go for a share buyback mirrors a trend followed by other homegrown IT companies. India’s largest software services company, Tata Consultancy Services Ltd, completed a ₹16,000-crore buyback in May, while Infosys Ltd has also promised to return ₹13,000 crore to shareholders this year.

HCL Technologies Ltd too is expected to start its ₹3,500- crorebuyback in the coming months.

Wipro made the announcement while declaring its results for the first quarter of 2017-18. Wipro’s dollar revenue inched up 0.9% sequentially to $1.9 billion in the three months to June (0.3% rise in constant currency terms). This better-than-expected show was primarily on account of higher spend from banking clients as the company reported a 4.1% sequential growth in BFSI (banking, financial services and insurance). The management had earlier outlined at-best no growth in constant currency terms in the April-June period.

Net profit declined 8% to $321 million from $349 million in the preceding quarter, hurt by unfavourable currency movement and as the company recorded a $70 million gain from the sale of Wipro EcoEnergy in the earlier quarter. Consequently, operating margin narrowed 150 basis points to 16.8% from 18.3% at the end of March quarter.

A Bloomberg survey of analysts had estimated revenue of $2.06 billion (₹13,242.50 crore) and a profit of $316.01 million (₹2,031.5 crore).

Wipro management expects to grow at-best 1.5% in the July-September period, which the management claims reflects the momentum it needs to end the current fiscal with industry matching growth numbers.

Still, Wipro’s first-quarter performance lagged its larger peers, as TCS posted a 3.1% sequential dollar revenue growth (2% in constant currency terms) and Infosys recorded a 3.2% growth (2.7% in constant currency terms).

Wipro saw its workforce increase by 1,309 employees from the earlier quarter to 166,790 by the end of June.