Wipro share buyback, Q4 results today. Earnings preview, stock price targets, buyback history & more

IT major Wipro is all set to announce its March quarter results and much-awaited share buyback on Thursday. While the IT firm is seen reporting muted set of numbers due to softness in the consulting business, BFSI, retail and tech verticals, all eyes would be on its share buyback which, if announced, would be fifth such proposal in eight years.

In terms of earnings, ICICI Securities sees Wipro’s sales falling 0.5 per cent sequentially in constant currency (CC) terms in the March quarter translating to 11.5 per cent YoY CC growth in FY23. This would be near the lower end of the guided range of 11.5-12 per cent in FY23, thanks to weakness in consulting business and worsening macro environment.

ICICI Securities estimated 100 bps cross-currency revenue tailwinds for Wipro, but expects EBIT margin to remain largely flattish (20-30bps) sequentially. The domestic brokerage expects Wipro to guide minus 1 per cent to 1 per cent QoQ CC revenue growth for Q1FY24.

Brokerage IDBI Capital Markets said Wipro may flattish revenue growth in constant currency terms. This brokerage said that softness in the consulting business, BFSI, retail and tech verticals is expected to result in overall muted growth.

“We forecast EBIT margin to grow by 90 bps QoQ led by an uptick in utilization,” IDBI Capital Markets said. The brokerage sees 6.6 per cent QoQ and 5.4 per cent YoY growth in the net profit of Wipro in Q4. Revenue in dollar terms may grow 0.9 per cent and 3.7 per cent, respectively, during the quarter.

Brokerage Elara Securities and Sharekhan said Wipro may report about 5 per cent growth in profit on about 13 per cent rise in revenues. Centrum Broking forecast about 12.80 per cent YoY rise in revenue for Wipro and a 2.6 per cent rise in profit after tax for the quarter. All eyes would be on the June quarter guidance and the management commentary on M&A and updates on large deal wins.

Ahead of its results, Wipro had an average target price of Rs428.15, as per Trendlyne, which suggests a potential 14.31 per cent upside.

Wipro dividend history

Wipro last came out with a Rs 9,500 crore share buyback in 2020 when the IT major bought back 23.75 crore shares at Rs 400 apiece. The IT major announced about the completion of the extinguishment of shares on January 21, 2021, as per data available with AceEquity.

Before that, the Bengaluru-based company announced a Rs 10,500 crore share buyback in 2019. A total of 32.31 crore shares re bought back at Rs 325 per share. Wipro had also announced a Rs 11,000 crore share buyback in 2017. That time, the company offered to buy back 34.37 crore shares at Rs 320 apiece. The buyback shares represented 7.06 per cent of the total paid-up share capital then.

Besides, Wipro went ahead with a Rs 2,500 crore share buyback in 2016. A total of 4 crore shares were offered to be bought back at Rs 625 apiece then. Meanwhile, Wipro announced bonus issue in the ratio of 1:1 in 2017 and 1:3 in 2019.

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