Promoter Azim Premji, who through individual shareholding entities controls about 74% of the company, intends to participate in the buyback, Wipro said. That would mean Premji could offload shares worth Rs 7,039 crore (about $1 billion) in the fourth buyback in the last five years. Wipro did its largest share buyback ever, worth $1.7 billion, last year. It did a buyback of Rs 2,500 crore in 2016 andRs11,000 crore in 2017.
The company’s American depositary receipts (ADRs) were down about 3% in morning trades on the NYSE, but the impact on the Indian stock market will be visible only on Wednesday. Wipro shares are up 50% since the beginning of the year.
Wipro also reported its second quarter results where revenue dropped 3.4% on a constant currency basis compared to last year, and 2.2% on a reported basis to $1.9 billion. That was better than the 4.4% and 5.7% drop respectively in the first quarter, which shows the demand momentum is slowly coming back. Sequentially, revenue was up 2% on a constant currency and 3.7% on a reported basis as growth returned across verticals, except energy and technology. Net profit was down 3.4% to $335 million.
“The demand environment has improved from Q1,” said CEO Thierry Delaporte, who completed his first full quarter at the helm. The intensity of sales activity, he said, continues to rise, and the pipeline is robust. “The overall pace of decision-making has improved though it is still a bit slower on the larger ticket hunting deals. The fresh volume we added has been highest over the last many quarters,” he said. The better visibility on the deal pipeline also led the company to resume its guidance, which it suspended in April at the onset of the pandemic. Wipro now expects to grow 1.5-3.5% sequentially, or a revenue of $2.02-2.06 billion, in the ongoing quarter.
Wipro hired 3,000 freshers and 439 laterals in the September quarter. The company’s total headcount is now 1.8 lakh. It has given 100% variable payout in the second quarter. Wipro will acquire Eximius Design, an engineering services company focused on semiconductor, software and systems design, for $80 million. Eximius provides solutions and services for building smarter, smaller and faster connected products for various use cases of IoT, Industry 4.0, edge computing, cloud, 5G and AI.