Wipro Q2 results: Net profit dips 3.4% to Rs 2,465 crore; board announces share buyback of Rs 9,500 crore

IT major Wipro on Tuesday reported 3.40 per cent year-on-year (YoY) decline in its consolidated net profit at Rs 2,465.70 crore for the second quarter ended September 30, 2020, against net profit of Rs 2,552.70 crore in the corresponding quarter last year. On the sequential basis, profit grew 3.2 per cent from Rs 2,390.4 crore in June quarter of the current fiscal.

The Bengaluru-based company's consolidated revenue declined marginally by 0.07 per cent YoY to Rs 15,114.50 crore as against Rs 15,125.60 crore posted in the same quarter last year.

Consolidated IT services revenue stood at Rs 14,768 crore in Q2 FY21 compared to Rs 14,656 crore in corresponding period last fiscal. In dollar terms, IT services segment revenue was at $1,992.4 million, an increase of 3.7 per cent QoQ.

Going forward, Wipro expects revenue from IT services business to be in the range of $2,022 million to $2,062 million in December quarter. This translates to a sequential growth of 1.5 per cent to 3.5 per cent.

Commenting on Q2 earnings, Thierry Delaporte, CEO and Managing Director said, "We had an excellent quarter with growth in revenues, expansion of margins and robust cash generation. I am very excited about the opportunities that are ahead of us and encouraged by the acceleration in business momentum we have seen this quarter. Our strategy is to focus on growth in prioritised sectors & markets led by vertical solution offerings."

Wipro's board also approved a proposal to buyback up to 23.75 crore equity shares of the company for an aggregate amount not exceeding Rs 9,500 crore, being 4.16 per cent of the total paid-up equity share capital at a price of Rs 400 per share.

In a separate development, Wipro has announced that it has signed a definitive agreement to acquire US-headquartered Eximius Design, a engineering services company with strong expertise in semiconductor, software and systems design. The company, however, did not disclose the financial transaction involved in the deal. The acquisition is subject to customary closing conditions and regulatory approvals and is expected to close in the quarter ending December 31, 2020.

Ahead of Q2 earnings, shares of Wipro ended Tuesday's trade at Rs 375.75, down 0.48 per cent, against previous closing price of Rs 377.55 on the BSE.

Also Read: Wipro approves Rs 9,500 crore share buyback plan at Rs 400 apiece