Software major Wipro Tuesday posted 38.4 per cent rise in net profit at about Rs 2,494 crore for March 2019 quarter and wooed shareholders with up to Rs 10,500 crore buyback plan, even as it projected a potential fall in IT services revenue for the June quarter.
The Bengaluru-based company said its revenue from operations - under IND AS accounting norms - grew 8.9 per cent to Rs 15,006.3 crore in the period under review from Rs 13,768.6 crore in the year-ago period. Its net profit stood at Rs 1,800.8 crore in the January-March 2018 period.
IT services segment revenue - which accounts for a bulk of Wipro's topline - rose 1.4 per cent sequentially to USD 2,075.5 million in March quarter, meeting its guidance of 0-2 per cent growth.
However, for the June 2019 quarter, Wipro has forecast its IT services revenue to be between USD 2,046-2,087 million. "This translates to a sequential growth of -1 per cent to 1 per cent, excluding the impact of the divestment of our Workday and Cornerstone On Demand business which was concluded in the quarter ended March 31, 2019," Wipro said in a regulatory filing.
Earlier in the day, Wipro confirmed that a few of its employee accounts were affected in an "advanced phishing campaign", and it has taken remedial steps to contain and mitigate any potential impact. It has also retained an independent forensic firm to assist the company in its investigation of the matter.
Stating that it does not expect any legal ramifications from the breach, Wipro CEO Abidali Z Neemuchwala stated that the alert was detected about a week ago and that the company has informed the "handful customers" with whom it believes the said employees of Wipro were associated.
Wipro shares closed at Rs 281.10 apiece, down 2.45 per cent from its previous close on the BSE. The company's results for the fourth quarter and FY2019, along with the buyback plan announcement was made after market hours.
Sanjeev Hota, Head of Research at Sharekhan by BNP Paribas, said the fourth quarter performance was "tepid" with revenues, margins and profit missing the estimates.
"Further, guidance for Q1FY20 is weaker than our expectations owing to delay in order booking. Management sees stable demand environment with traction in the BFSI and consumer space. However, softness in the healthcare vertical continues," he added.
On the buyback, Hota said the offer would be good for retail investors to tender their shares and also could be a tactical opportunity for investors for short-term investment gain.
Commenting on the results, Neemuchwala said Wipro's teams have executed well on its strategy that has resulted in consistent improvement of year-on-year growth each quarter.
"We have built a strong foundation for growth on the back of healthy order book and continued investments in big bet areas of Digital, Cyber security, Engineering services and Cloud. Our customers find these investments relevant as part of their digital transformation and IT operations landscape modernisation, enabling us to win in the market," he added.
"...we have built a strong foundation for growth and we believe that growth in revenue this year will be better than last year," Neemuchwala said.
For the full fiscal (2018-19), Wipro saw its net profit increasing by 12.6 per cent to Rs 9,017.9 crore, while revenue from operations was up 7.5 per cent to Rs 58,584.5 crore.
Wipro board has also approved a Rs 10,500 crore buyback plan, under which it will buy back up to 32.3 crore shares at Rs 325 apiece.
Wipro Chief Financial Officer Jatin Dalal said: "...we are returning the cash we have generated through the year to shareholders. It is a very healthy payout, it translates into 123 per cent payout ratio for FY18-19 for our shareholders".
During the March quarter, the company had allotted bonus equity shares in the ratio of 1:3. Besides, Wipro has not recommended any final dividend and the total dividend for the financial year 2018-19 remains at Re 1 per equity share.
The company's revenues from IT products during the March quarter was Rs 280 crore, while that from India state-run enterprises segment was at Rs 180 crore.
Wipro had 1.71 lakh employees at the end of March quarter.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)