Wipro Q1 net up 1.2%; announces Rs 11,000-cr share buyback offer
India's third largest IT firm Wipro on Thursday reported a 1.2 per cent rise in its consolidated net profit at Rs 2,076.7 crore for the AprJune quarter, even as it announced a mega buyback offer of Rs 11,000 crore, joining the growing roaster of IT firms returning surplus cash to their shareholders.
The Bengaluru-based firm had registered a net profit of Rs 2,052 crore in the year-ago period. Its total income grew marginally to Rs 14,281.4 crore during the first quarter.
The company's board also announced a share buyback proposal of Rs 11,000 crore entailing 34.3 crore equity shares at Rs 320 apiece. Wipro, which gets bulk of its topline from IT services, said it expects revenues from that business to be in the range of USD 1,962-2,001 million in the September quarter. For the June quarter, IT services revenue was at USD 1,971.7 million, up 2.1 per cent from the year-ago period. "We delivered revenues above the upper-end of the guidance range.. Our focus on digital, combined with our investments in client mining, has resulted in strong growth in top accounts," Wipro CEO Abidali Z Neemuchwala told reporters.
He also said in Q1, the company delivered revenues above the upper end of the guidance range, besides revenue grew QoQ .9 per cent in reported currency and 0.9 per cent in reported currency and 0.3 per cent in constant currency. "As indicated in April, there was uptick in ENU and BFSI led by digital and a recovery in our India business post the restructuring," he said. Neemuchwala said digital revenues in Q1 constituted 22.5 per cent of revenues with a growth of 3.0 per cent sequentially. Consulting revenues in Q1 constituted 5.7 per cent of revenues and grew at 3.7 per cent sequentially. Wipro, which announced its financial results after trading hours, saw its shares close marginally lower at Rs 269 on the BSE. Neemuchwala said the Board of Directors has approved a buyback proposal, subject to the approval of shareholders through postal ballot, for purchase by the company of up to 343.75 million equity shares of Rs2 each (representing 7.06 per cent total equity capital) from the shareholders of the company on a proportionate basis by way of a tender offer. The company's revenue from IT products during the quarter was Rs 630 crore, an increase of 7 per cent yearon-year.