Wipro share price plunged 6.4 per cent to Rs 351.45 apiece on BSE a day after the IT company posted 3.4 per cent decline in consolidated net profit at Rs 2,465.7 crore for the July-September quarter. Wipro had recorded a net profit of Rs 2,552.7 crore in the year-ago period. The board of the company has also approved a share buyback plan of Rs 9,500 crore for purchase of up to 23.75 crore equity shares at Rs 400 per share. This is 4.16 per cent of the paid-up equity share capital of the company as on September 30, 2020. Besides, Wipro also acquired an engineering services company Eximius Design. “Wipro result is on the expected line. But it is already discounted well as expectations were built up after the strong numbers from TCS,” Vishal Wagh, Head of Research, Bonanza Portfolio Ltd, told Financial Express Online.
Wagh also added that the downside seems limited till Rs 340 in Wipro till the time the buyback process doesn’t get completed. “Though, the upper side is also limited to 400. In short, the range now will be Rs 340-400,” Wagh said. The buyback price was at 6.4 per cent premium over the previous close of Rs 373.5 apiece. The gross revenue of the company stood at Rs 15,110 crore, an increase of 1.4 per cent sequentially and an on-year decrease of 0.1 per cent. Wipro has signed a definitive agreement to acquire Eximius Design, which has strong expertise in semiconductor, software and systems design.
The company in a press release informed that Eximius’ offerings and solutions will be consolidated as a part of Wipro’s EngineeringNXT framework, providing customers with a platform to innovate and engineer the next generation of products and platforms at scale.
Research and brokerage firm Motilal Oswal Financial Services said that Wipro reported better-than-expected revenue growth for the quarter with broad-based recovery across verticals, continued margin resiliency, and strong cash generation which were the key positives for the company. It maintained a ‘neutral’ rating to the stock as it awaits further evidence of the execution of Wipro’s refreshed strategy and a successful turnaround from its growth struggles over the last decade before turning more constructive on the stock.
In 2019, Wipro had undertaken a buyback programme of 32.31 crore shares at Rs 325 apiece, aggregating to about Rs 10,500 crore. While in 2017, it had announced a buyback worth Rs 11,000 crore, and Rs 2,500 crore in the year 2016.
Around 9.30 AM, Wipro shares were trading 5.80 per cent lower at Rs 353.95 apiece, as compared to a 0.30 per cent fall in the S&P BSE Sensex