IT major Wipro and conglomerate Reliance reported impressive Quarter 1 results today and the Dalal streets look elated.
Global software major Wipro Ltd on Thursday proposed to buy back almost 344 million shares of Rs 2 face value for Rs 11,000 crore ($1.7 billion) at Rs 320 ($4.95) per share.
For the IT services segment, Wipro's revenue came in at $1,971.7 million, a sequential increase of 0.9 per cent and 0.3 per cent in constant currency terms. "Our focus on Digital combined with our investments in client mining have resulted in strong growth in Top accounts." said Abidali Z. Neemuchwala, Chief Executive Officer and Member of the Board said in a statement.
Analysts expect the company to guide its dollar revenue growth in the range of 0-2 percent or 1-3 percent for July-September quarter.
It also expected to maintain IT services EBIT margin in a narrow range in FY2018 (versus 17.9 percent in FY2017) on constant currency basis. The IT giant claimed that it reported an 8 per cent drop in net profit at Rs. 2,076.50 crore for the June quarter, as compared to Rs. 2,261.10 crore in the March quarter. Revenue grew 0.2% to 136.26 billion rupees.
The management indicated that it has (1) structural levers such as improving profitability of acquisitions and turnaround in India and Middle East business after completion of restructuring exercise, and (2) operational levers at hand are automation led by HOLMES. Revenue growth is expected to be flat.
On new order wins, Wipro said, it won a multi-year engagement with a large utility company in the United States to deliver data center, disaster recovery, service desk and end user services.
Speaking at Wipro's 71st Annual General Meeting, Wipro chairman Azim Premji on Wednesday had said, "looking ahead, we continue to see volatile economic environment but clients are looking to spend in technology as technology is becoming a major differentiator in all businesses". He said the company will give 40 to 45% of payout of annual profits, but this will not be uniform in a way that there are regulatory requirements and conditions that need to be met for buyback.
The company's blue chip scrip ended at Rs 269 per share on the BSE at the of Thursday's trading session, losing Rs 2.25 from Wednesday's closing price of Rs 271.25.
Share buyback: Wipro proposes the repurchase of 343.75M equity shares at ₹2 each. During the June quarter, Wipro added 1,309 (gross) employees, taking its total headcount to 1,66,790 people.