Wipro hits 52-wk high on Q1 results, share buyback plan

The stock hits 52-week high of Rs 291, up 8% on BSE in early morning trade on back of heavy volumes

Wipro hits 52-week high of Rs 291, up 8% on BSE in early morning trade, after the company reported a good set of numbers.
 

The IT services sales came in at $ 1,972 million against analyst estimate of  $1,950 million, a growth of 0.9% quarter on quarter (qoq), while constant currency (CC) qoq growth of 0.3%.

For Q2FY2018, the company expects revenues from its IT Services business to be in the range of $ 1,962 million to $ 2,001 million.

“On operating front, the EBIT (earnings before interest and tax) margins came in at 16.2% V/s 14.3% in Q4FY2017, mainly driven by the better than expected growth and internal efficiencies. This was against the expectations of 13.0%,” Angel Broking said in a note.

The quarter was better than expected on all fronts, mainly driven by better than expected volume growth during the quarter, however the company expects the growth to come by only in Q4FY2018, while Q2FY2018 is again expected to be weak with a almost a flattish quarter, added note.

Meanwhile, the board of directors approved a buyback proposal, for purchase by the company of up to 343.75 million equity shares of Rs 2 each at price of Rs 320 per share from the shareholders of the company on a proportionate basis by way of a tender offer.

"The buy back is a good amount and is been done at a good price and will see a stock price rise in the immediate future. However, at the given price the stock is more than fairly priced for near term and hence investors can tender their shares," said the brokerage firm.

At 9:32 am; the stock was up 7.5% at Rs 289 on BSE, as compared to 0.18% rise in the S&P BSE Sensex. The trading volumes on the counter more than doubled with a combined 6.5 million shares changed hands on BSE and NSE in first 17 minutes of trade.