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Business News/ Markets / Stock Markets/  Wipro Buyback: Investors cheer news as stock rises over 3%

Shares of Wipro Ltd rose over 3% on Friday's early trade after the company announced buyback up to 269,662,921 shares of face value 2 each from the shareholders at 445 per share on Thursday. According to the IT company, the share buyback will cost 12,000 crore and account for 4.91% of all equity shares.

The IT major, Wipro stated that the letter of offer would be issued in compliance with the Buyback Regulations and that the procedure, record date, timelines, and other information will be disclosed in the public announcement.

On Thursday, the company for the March quarter, reported a 0.4% year over year (YoY) drop in consolidated net profit at 3,075 crore. The IT services company had previously recorded a profit of 3,053 crore.

According to Wipro, its revenue from operations as a whole increased by 11.2% to 23,190 crore from 20,860 crore in the same time last year. The revenue for the December quarter was 23,229 crore.

The company's revenues in constant currency dropped 0.6% sequentially, while dollar revenue rose by 0.7% quarter-on-quarter.

Wipro Share buyback: IT major announces 12,000 crore buyback; here are 10 key points to know

According to ICICI Direct Research, the company continues to make strong bookings, but revenue conversion is still pending due to delays in the ramp-up of ongoing projects as well as the launch of certain recently signed new partnerships. Additionally, it is evident in the subpar Q1FY24 revenue projections. It also reflects potential weaknesses in their consultancy company's financial performance, which is the first to experience problems in a weakening macro environment.

"The company’s multiple discounts to large peers (about 20% discount versus Infosys and about 40% to TCS) likely to stay or may be widened, if they continue to disappoint on growth prospects. We also observed that recent buyback by large peers didn’t help in stock price appreciation and we don’t see it playing out differently in case of Wipro" said the brokerage.

On Friday, shares of the company opened at 382.35 per share, up 2%. So far the stock has hit a intraday high of 388 and low of 379.85.

“Post the result and buyback announcement, Wipro has seen a strong traction in the morning session, expect this positive move to continue where recent highs around 410 can be retested, 370 is the immediate support," said Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One.

Wipro's Q4 attrition rate moderates to 19.2%, headcount reduces to 256,921 employees



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Updated: 28 Apr 2023, 10:28 AM IST
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