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Published: Apr 28, 2023
Updated: Apr 28, 2023

Wipro's Q4 Results: Revenue Meets Estimates, Focus on Large Transformation Deals and Share Buyback

Wipro, a leading IT services company, has announced its financial results for the fourth quarter. While the revenue remained flat but met expectations, the company's guidance for the current quarter has disappointed investors. Alongside the results, Wipro's CEO highlighted the company's success in winning large transformation deals and deepening client relationships. Additionally, Wipro has announced a significant share buyback program.

Revenue Performance and Guidance:

Wipro reported revenue of $2,823 million, which aligns with the CNBC-TV18 poll expectations. In rupee terms, the revenue slightly missed estimates, standing at Rs 23,190 crore. The flat revenue growth can be attributed to a slowdown in discretionary spending. Looking ahead, Wipro expects a decline of 3 percent to 1 percent in constant currency revenue for the current quarter. This guidance is lower than market estimates, which ranged from a 1 percent growth to a 1 percent decline.

Margin and Operational Performance:

The company's EBIT margin for the quarter stood at 16.3 percent, slightly surpassing expectations by 10 basis points. Wipro's management attributed this achievement to their success in winning large transformation deals and benefiting from a consolidating market. The company recorded large deal wins of over $1 billion for the second consecutive quarter, with total bookings reaching $4.1 billion. The fiscal year 2023 ended with the highest-ever bookings recorded in a single year.

Share Buyback Announcement:

Wipro has unveiled a share buyback program through the tender offer route, amounting to Rs 12,000 crore. The buyback price is set at Rs 445 per share, representing an 18 percent premium to the closing price. This decision reflects the company's confidence in its future prospects and its commitment to enhancing shareholder value.

Market Perspective and Conclusion:

Analysts have shared their views on Wipro's performance and the broader sector outlook. Omkar Tanksale of Axis Securities commented on the cautious sentiment surrounding the IT sector, with concerns over margin pressures affecting other industry players like Infosys, HCLTech, and Tech Mahindra. Wipro's stock price remained relatively unchanged following the announcement, with a year-to-date decline of nearly 5 percent.

Results meet expectations; buyback announcement brings cheer to investors

Wipro's Q4 results met expectations, with a focus on securing large transformation deals and deepening client relationships. While the company's revenue remained flat, it demonstrated resilience amid a slowdown in discretionary spending. The lower guidance for the current quarter reflects prevailing market uncertainties. Wipro's announcement of a significant share buyback program showcases its confidence in the future and commitment to delivering value to shareholders.