The board of IT services major Wipro has approved a share buyback of Rs 9,500 crore, which is 4.16% of the total paid-up capital at a price of Rs 400 per share. This would be 23.75 crore equity shares.
The IT major also announced that its net profit declined 3.4% year-on-year to Rs 2,470 crore while gross revenue decreased marginally by 0.1% to Rs 15,110 crore in the July-September quarter (Q2) of FY21. For the quarter ending December 31, Wipro’s said it expects revenue from the IT Services business to grow around 1.5-3.5% sequentially to the range of $2,022 million to $2,062 million.
Addressing the media post the earnings, Saurabh Govil, head of human resources at Wipro said that the company would be giving promotions to 80% of the eligible employees in the October-December quarter (Q3). The IT firm would also be offering hikes to junior employees who were hired from colleges last year. The quantum of increment, he said, will be the same as what was given last year.
On the tightened H-1B norms, Wipro said that there wouldn’t be an impact from a business standpoint since the company has been focusing on localisation for the past 2-3 years. Localisation in the US is now at 71.9%.
In terms of business segments, revenue from the IT Services segment came in at $1,992.4 million, an increase of 3.7% QoQ
Thierry Delaporte, CEO and Managing Director said, “We had an excellent quarter with growth in revenues, expansion of margins and robust cash generation. I am very excited about the opportunities that are ahead of us and encouraged by the acceleration in business momentum we have seen this quarter. Our strategy is to focus on growth in prioritized sectors & markets led by vertical solution offerings.”
“The announcement to buyback equity shares is part of our philosophy to deliver consistent returns to shareholders,” said CFO Jatin Dalal.
“Members of the promoter and promoter group of the company have indicated their intention to participate in the proposed buyback,” Wipro said in a statement.
Despite the expectation of a buyback, Wipro’s shares were trading marginally down by around half a per cent on both the Bombay Stock Exchange and National Stock Exchange. The stock closed 0.48% down at Rs 375.75 on the BSE and 0.61% down at Rs 375 on the NSE.