Wipro profit rises 31.8percent, announces 1:3 bonus share

Bengaluru: Indian IT services company Wipro on Friday posted a 31.8 per cent year-on-year jump in consolidated net profit at Rs 2,544.5 crore for the quarter ended December 31, 2018, and also announced a 1:3 bonus share offer. Wipro’s IT services revenues, that account for bulk of its top line, stood at $2,046.5 million (around Rs 14,555 crore), up 1.8 per cent over July-September quarter, and the company expects the sales from this segment to grow 0-2 per cent in March quarter. Overall, Wipro’s revenue from operations expanded 10.17 per cent to Rs 15,059.5 crore during the period from Rs 13,669 crore in the third quarter of FY2017-18.  The net profit growth of nearly 32 per cent came on the back of higher IT services revenue. The net profit in the December 2017 quarter was at Rs 1,930.1 crore. “Our strategic investments, backed by strong client relationships and client spends towards enterprise modernisation and digital transformation have enabled us to deliver a very satisfying quarter,” Wipro CEO and Executive Director Abidali Z Neemuchwala said.

Revenue from IT products segment for the quarter was Rs 310 crore ($45.2 million), while that from India State Run Enterprises segment — which was recently carved out from the IT services basket — was at Rs 170 crore ($24.6 million). Wipro added 928 employees in the December quarter, and the total staff count stood at 1.72 lakh employees as on December 31, 2018. Wipro said its digital revenue grew 6.4 per cent sequentially and is now at 33.2 per cent of overall revenue. Wipro’s numbers come days after larger rivals Tata Consultancy Services and Infosys Ltd announced their quarterly earnings. India’s second largest IT firm Infosys reported a 30 per cent drop in its December quarter net profit on higher expenses, while TCS clocked over 24 per cent growth in net income during the just ended quarter, and even guided towards a healthy 2019 citing a “strong” order pipeline. Meanwhile, Wipro said that it expects IT services business revenue to be in the range of USD 2,047 million to USD 2,088 million for the March quarter, which translates into flat to 2 per cent growth sequentially.

The Wipro board also approved an issue of bonus shares – offering one bonus share for every three held by shareholders, the company said in a regulatory filing. “Issue of bonus equity shares in the proportion of 1:3, that is one bonus equity share of Rs 2 each for every three fully paid-up equity shares held… subject to approval of the members of the company,” the filing said. The Bengaluru-based company has announced an interim dividend of Re 1 per equity share with January 30, 2019 as the record date, it added. Wipro had announced a bonus issue of 1:1 in April 2017. Friday’s filing said Wipro has an aggregate Rs 46,847.9 crore as on December 2018 in free reserves, securities premium account and capital redemption reserve account. The company has also increased its authorised share capital from Rs 1,126.5 crore to Rs 2,526.5 crore by creation of additional 700 crore equity shares of Rs 2 each, it added. Cash-laden Indian IT firms have been returning surplus cash on their books to shareholders by way of dividends and buybacks. Earlier this month, Infosys had announced a buyback offer of Rs 8,260 crore.a

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