Wipro is scheduled to announce Q4FY23 and a proposal for shares buyback on April 27
Wipro, the Indian multinational corporation that provides information technology, consulting, and business process services, is set to consider a share buyback proposal on April 27, 2024. This move is part of the company’s ongoing efforts to enhance shareholder value and strengthen its financial position.
A share buyback, also known as a share repurchase, is a corporate action in which a company buys back its shares from the market, thereby reducing the number of outstanding shares. This process has several benefits for shareholders, including boosting the stock price and increasing earnings per share.
Wipro has a strong history of share buybacks, having completed three such programs in the past. The last buyback was in 2019 when the company bought back 323.1 million shares for a total consideration of Rs 10,500 crore ($1.4 billion). The proposed buyback this year is expected to be in the range of Rs 12,000-15,000 crore ($1.6-2 billion).
Wipro buyback of shares and Q4FY23
The decision to consider a share buyback comes at a time when Wipro is experiencing significant growth in its business. The company’s revenue grew by 18.4% YoY to Rs 19,571 crore ($2.6 billion) in the third quarter of FY23, while its net profit increased by 25.4% YoY to Rs 3,721 crore ($495 million). The company has also announced several strategic acquisitions in recent months to expand its capabilities and offerings.
The buyback proposal is expected to boost Wipro’s share price, which has been on an upward trajectory over the past year. The company’s shares have gained nearly 50% in value since April 2022 and are currently trading at around Rs 750 ($10) per share. The buyback will also help to reduce the number of outstanding shares, which will increase earnings per share and improve the return on equity for existing shareholders.
The decision to consider a share buyback is a strategic move by Wipro’s management team to increase shareholder value. The company has been making significant investments in its business, including acquiring several companies in the digital space, such as Ampion and Encore Theme Technologies. These investments are aimed at enhancing Wipro’s capabilities and offerings and expanding its market share in the highly competitive IT services industry.
The company’s growth strategy has been successful, as evidenced by its strong financial performance over the past year. The company has reported consistent growth in revenue and net profit, driven by increased demand for its services and the successful integration of its acquisitions.
Buyback helps the company’s long-term financial growth
The buyback proposal also highlights Wipro’s commitment to returning value to its shareholders. Share buybacks are a common way for companies to reward shareholders by returning surplus cash and improving the value of their investments. Wipro’s management team has demonstrated its commitment to shareholder value by regularly returning cash to shareholders through dividends and buybacks.
The proposed buyback is also in line with Wipro’s long-term financial objectives. The company has set a target of achieving $15 billion in revenue by 2025 and has been making significant investments in its business to achieve this goal. The buyback will help to reduce the number of outstanding shares, which will increase earnings per share and improve the return on equity for existing shareholders. This, in turn, will help Wipro to achieve its long-term financial objectives.
In conclusion, Wipro’s decision to consider a share buyback proposal on April 27 is a positive development for the company and its shareholders. The move is expected to enhance shareholder value and strengthen the company’s financial position, while also boosting its share price. As Wipro continues to experience strong growth in its business, the buyback will serve as a testament to the company’s commitment to creating value for its shareholders.
