Wipro to buy back shares worth Rs 11000 crore

Wipro announced the financial results under International Financial Reporting Standards (IFRS) for the quarter that ended on June 30 this year.

Wipro shares were trading higher by almost 8 per cent as the country's third-largest IT outsourcer has announced a second buyback in two years, of 343.75 million shares, which is about 7 per cent of the equity, aggregating a payout of ₹11,000 crore.

The Bengaluru-based firm had registered a net profit of Rs 2,052 crore in the year-ago period.

However, Wipro's announcement of a buyback of up to 343.75 million shares at Rs. 320 apiece, a substantial premium to Thursday's closing price of Rs. 269.15, is likely to boost investor sentiment on Friday.

Net profit rose 1.2 per cent to ₹2,077 crore year on year.

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.

IT Services Segment Profits2 were ₹21.9 billion ($339 million1), a decrease of 5.8% YoY.

"We delivered revenues above the upper end of the guidance range". Operating margin from IT services was 16.8 per cent for Q1.

Wipro, which gets bulk of its topline from IT services, said it expects revenues from that business to be in the range of Dollars 1,962-2,001 million in the September quarter. "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.

Unlike its rival Infosys, Wipro does not give annual revenue guidance.

Revenue from software products increased 7 per cent annually to Rs 630 crore ($98 million) in the quarter under review.

He added there were new opportunities being provided to employees. "While the core business will improve, regulatory uncertainties in the healthcare payer market are causing headwinds", said Neemuchwala. The company's gross revenues were marginally up at ₹13,626 crore from ₹13,599 crore over the same period past year.

On the hiring front, the IT services division added 1,309 techies during the quarter, taking the headcount to 166,790 from 165,480 a quarter ago and 158,272 a year ago.

Vanessa Coleman