Wipro shares in focus as IT firm to consider share buyback on April 27: History, Q4 results, stock returns & more

Wipro shares would be in focus on Monday morning, as the IT major said its board would consider a share buyback proposal over April 26-27, whose outcome will be communicated to stock exchanges on April 27, the day the Bengaluru-based firm will also disclose its March quarter results.

Wipro had last came out with a Rs 9,500 crore share buyback in 2020. The company had bought back 23.75 crore shares at Rs 400 apiece then. As per data available with AceEquity, the IT major announced about the completion of the extinguishment of shares on January 21, 2021.

Before this, the company came out with a Rs 10,500 crore share buyback in 2019. The buyback offer size was 32.31 crore shares, which were bought back at Rs 325 per share.

Wipro had announced a Rs 11,000 crore share buyback in 2017. That time, the company had offered to buy back 34.37 crore shares at Rs 320 apiece. The buyback shares represented 7.06 per cent of the total paid-up share capital then.

Wipro also came out with a Rs 2,500 crore share buyback in 2016. A total of 4 crore shares were offered to be bought back at Rs 625 apiece then. Meanwhile, Wipro announced bonus issue in the ratio of 1:1 in 2017 and 1:3 in 2019.

Wipro stock return

Shares of Wipro have underperformed the benchmark in 2023, as they fell 6 per cent this calendar so far against a 3.15 per cent drop in the Nifty IT index. Shares of Tech Mahindra and HCL Technologies have been flat during the same period. Larger peer Infosys plunged 20 per cent while TCS has declined 3 per cent during the same period.

The scrip has fallen 31 per cent in the last one year but is up 78 per cent in the last five years.

Wipro Q4 results preview

ICICI Securities expects Wipro’s revenue to decline 0.5 per cent QoQ CC in Q4FY23, translating to 11.5 per cent YoY CC growth in FY23E, near the lower end of the guided range of 11.5-12 per cent in FY23, given the weakness in consulting business and worsening macro environment. It estimated 100 bps cross-currency revenue tailwind for Wipro. EBIT margin is expected to be largely flattish (20-30bps), QoQ. The brokerage expects Wipro to guide minus 1 per cent to 1 per cent QoQ CC revenue growth for Q1FY24.

Brokerage IDBI Capital Markets expects flat revenue growth from Wipro in constant currency terms. The brokerage said that softness in the consulting business, BFSI, tech and retail verticals is expected to result in overall muted growth. “We forecast EBIT margin to grow by 90 bps QoQ led by an uptick in utilization,” IDBI Capital Markets said. The brokerage sees 6.6 per cent QoQ and 5.4 per cent YoY growth in the net profit of Wipro in Q4. Revenue in dollar terms may grow 0.9 per cent and 3.7 per cent, respectively, during the quarter.

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