In the regulatory filing, Wipro has mentioned that they will be declaring the Q4 FY23 results after the two-day meeting which will be conducted on April 26 and 27, while the Board will be also considering the proposal of equity share buyback.
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What is Buyback and how does it affect share price?
Buyback of shares means when the company buys or purchases back its share from the investor who has invested in that particular company. One main reason for buying back is the excess funds in the company and instead of investing somewhere else, the company takes the decision to buy will reduce the power of the investor on the company.
Buyback is most probably considered a positive sign which increases the share price of the particular stock because it means that promoters have a firm belief that the company will grow shortly which is why they are buying back.
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Wipro opted for Buyback Fifth time in the last Seven years.
After 2021, it is the first buyback for Wipro whose proposal will be considered by the board on April 26-27, 2024.
Since last seven years, recent buyback was for FY21 which was between December 29, 2020, and January 11, 2021, when Azim Premji had tendered 22.89 crore worth about Rs 9,156 crore. The share was bought back by the company for Rs 400 per equity share.
Before that Wipro announced a buyback in 2019 of 32.31 crore shares with a value of Rs 10,500 crore. The price per equity share was Rs 325.
Wipro has also announced a buyback of 34.37 crore shares worth about Rs 11,000 crore and the share was bought back by the company for 320 per share.
The company also declared a buyback in 2016 of 4 crore shares worth about Rs 2,500 crore and the price per share was Rs 625.
Besides buyback, Wipro also announced a bonus issue in 2017 of 1:1 and 1:3 in 2019.
Image Source : Wipro
Quarterly results of Wipro
The company is showing growing results from the quarter end of March 2022. Net sales for the company have been increasing with Rs,20,860 crores at the quarter end of March 2022 and then Rs 21,528 crore in June 2022 and increased to Rs 22,539 crore at the end of the quarter of September 2022 and Rs 23,229 crore in the quarter of December 2022.
Net profit in the quarter of March 2022 was Rs 3,094 crore which decreased to Rs 2,560 crore in the June 2022 quarter and showed some growth in September 2022 and then rose to Rs 3,062 crore at the end of the quarter of December 2022.
The company is also focusing on reducing its expenses while making them either constant or decreasing them.
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Movement of Share Price
The last traded price for Wipro on Friday was Rs 368 and after the gap down opening on Monday, the company share price increased by 2% to Rs 376. The company share price may show positive growth after April 27, 2024, after the buyback of shares is considered and quarter results are announced.
But nothing can’t be said as Wipro’s large peers such as TCS did not make their net profit up to the estimation stated by the company and Infosys quarterly result was shocking for the investor it was way behind its estimates which resulted in a huge decline is Infosys share price.
