Wipro reported a 0.4 percent and a seven percent drop in its net profit on a YoY basis for March ending and for FY23, respectively.
IT major Wipro approved the buyback of 26,96,62,921 shares at a face value of rupees two each, subject to the company’s shareholders’ approval. This represents 4.9 percent of the total number of equity shares.
Wipro announced that it would buy back shares from its shareholders on a proportionate basis at Rs. 445 per share, totalling Rs. 12,000 crores.
Thierry Delaporte, CEO and Managing Director, said “We are pleased to announce our share buyback, which is part of our philosophy to deliver consistent returns to shareholders.”
Wipro reported a 0.4 percent YoY drop in consolidated net profit for March at Rs. 3074.50 crores, compared to Rs. 3087.30 crores in the same quarter last year, despite the strongest-ever bookings recorded in a year. Sequentially, the PAT saw a growth of about 0.7 percent and for FY23 the company reported a net loss of about seven percent, compared to FY22.
Delaporte said, “Our large deal order booking grew by 155 percent year-on-year for the quarter. Compared to just a few years ago, we are seeing a visible change in the structure of our deals and our market position. We are winning large transformation deals, benefitting from a consolidating market, and deepening relationships with existing clients.”
The operating margin for the quarter was 16.3 percent, and for the year was 15.7 percent. The revenue for the year was Rs. 90,487.6 million, an increase of 14.4 percent for the financial year. While the administrative expenses rose by 25 percent on a QoQ basis, the financial and other income rose by 38 percent for the company.
Jatin Dalal, Chief Financial Officer, said that despite macro headwinds, our focus on operational improvements and productivity enhancements led to our IT services margin exit at 16.3 percent in Q4.
Analysts expected a lag in revenues because of macro uncertainty, lower discretionary spending, and delay in decision-making. IDBI Capital Markets expected a 6.6 percent QoQ and 5.4 percent YoY growth in the net profit of Wipro in Q4 FY23 respectively, during the quarter.
Wipro’s competitor, Infosys share price tanked by 12 percent the day after the Q4 earnings were announced. Infosys reported a decline of seven percent on a sequential basis from Rs. 6,586 crore in Q3. The company said that the results were a shock to them and said that they will not have industry-leading growth until FY25. The recession and the financial crisis in the West have had a negative impact on the Indian IT industry, as the West contains a major portion of the client base.