Wipro’s board approves a proposal to buy back up to 4.16% of the company’s shares outstanding at ₹400 apiece for a total of ₹9,500 crore
Wipro Ltd has resumed giving investors quarterly revenue forecasts after pausing it for two quarters because of the pandemic, indicating renewed confidence about client spending. The software services company expects its IT services revenue to grow as much as 3.5% sequentially to $2.06 billion in the December quarter amid improvement in demand and a robust deal pipeline.
Wipro’s board on Tuesday approved a proposal to buy back up to 4.16% of the company’s shares outstanding at ₹400 apiece for a total of ₹9,500 crore. Last week, bigger rival Tata Consultancy Services Ltd’s board also cleared a proposal to buy back up to ₹16,000 crore worth of shares.
Wipro, which has been trailing its rivals for several years, aims to rev up its revenue momentum under its new chief executive and managing director, Thierry Delaporte, who joined the company in July. Delaporte has embarked on a five-point strategy that revolves around growth, focus and scale, offerings, building talent with domain expertise, and simplification of the operating model.
“The context for our customers has changed enormously through the pandemic. While the traditional IT services will continue to be essential, the next big wave of opportunity will be driven by next-generation services of cloud, digital transformation, internet of things, and 5G," Delaporte said.
The Bengaluru-based IT major posted a 3.2% sequential growth in net profit to ₹2,465 crore for the quarter ended September on improved manpower utilization and improvement in offshore revenue. Profit, however, declined 3.4% from a year earlier.
Gross revenue for the September quarter rose 1.4% sequentially and declined 0.1% from a year ago to ₹15,114.5 crore as growth in consumer and financial services segments improved. In dollar terms, IT services revenue grew 3.7% from the preceding quarter and declined 2.8% from a year earlier to $1.99 billion.
Wipro’s IT services operating margin widened to 19.2% from 19% in the preceding three months. “It was another quarter of strong performance on margins and cash flows. We improved on several operating parameters to deliver margin expansion of 0.2% in IT services segment," said Jatin Dalal, chief financial officer, Wipro.
Wipro also announced it has agreed to acquire Eximius Design, a engineering services firm with expertise in semiconductor, software and systems design, for up to $80 million.