BENGALURU: Bengaluru-headquartered IT services firm Wipro Ltd followed rival Tata Consultancy Services (TCS) into announcing a share buyback on Tuesday. The company said that it would buyback shares worth Rs 9,500 crore, representing 4.32 per cent of its total paid-up equity capital or 237.5 million equity shares. This comes just a week after TCS announced a similar plan for Rs 16,000 crore.
Wipro also provided a revenue guidance for the quarter ending December 2020, expecting revenue from the IT services business to range between USD 2,022 million to USD 2,062 million, translating into a sequential growth of 1.5 per cent to 3.5 per cent.
"We had an excellent quarter with growth in revenues, expansion of margins and robust cash generation. I am very excited about the opportunities that are ahead of us and encouraged by the acceleration in business momentum we have seen this quarter. Our strategy is to focus on growth in prioritized sectors and markets led by vertical solution offerings," said Wipro’s recently appointed chief executive officer Thierry Delaporte.
Wipro’s net profit for the second quarter, meanwhile, declined 3.4 per cent year-on-year to Rs 2,470 crore from Rs 2,552.70 crore a year ago. The consolidated revenues declined by 0.1 per cent to Rs 15,114.50 crore and operating margin for the quarter stood at 19.2 per cent, an expansion of 0.2 per cent compared to the previous quarter and 1.1 per cent year-on-year.
According to Delaporte, the company is counting on a leaner organisational structure and aggressive sales tactics to set it back on a growth trajectory. On being asked if the company would resort to doing away with several roles in the employee pyramid during an analysts call following the second quarter results, Delaporte did not give a clear answer.
Wipro's ex-CEO Abid Neemuchwala had made a similar announcement in 2016 on making the company leaner and decentralising it. Delaporte, meanwhile, is optimistic about the company’s growth prospects and margins due to returning demand, Covid-triggered digital transformation deals, and good client traction.
Wipro hired 13,000 employees during the quarter with the attrition rate falling to 11 per cent from 17 per cent in the previous quarter. Chief Human Resources Officer Saurabh Govil said that promotion cycles for 80 per cent of the workforce have already been started.