Wipro slips 7%
Wipro posted a 3% (QoQ) rise in consolidated net profit for quarter ended 30th Sept 2020 at Rs.2466 crore. This was on a 1% rise in revenue at Rs.15,097 crore.
Its IT services dollar revenue showed a 4% rise at $1992 million and constant currency IT services segment revenue increased by 2% v/s -7.5% in Q1. Rupee revenue for IT services was up 1%.
EBIT rose 2% at Rs.2835 crore and margins expanded 20 bps to 19.2%.
Free cash flows as a percentage of net income for H1FY21 was at 161% of net income.
On guidance, Wipro expects a QoQ growth of 1.5 to 3.5% in revenue in Q3.
The market is more excited about its buyback proposal, following the footsteps of TCS. It plans to buyback up to 23.75 crore shares at Rs.400/share, aggregating Rs.9500 crore. This is 4.16% of the paid-up capital currently.
Buyback at Rs.400/share is at a premium of 6.4% to yesterday’s close of Rs.375.50 on the BSE.
The market does not seem to be enthused with this performance of the company and the stock is the top loser on the BSE. The stock price slipped 7% to hit Rs.350. Its 10% LC for the day is at Rs.338.20. A few brokerage houses have eother maintianed their "underperform" rating or some have downgraded and that is impacting the stock price.