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Wipro's Q2 profit rises sequentially; 5 highlights from company's Q2 earnings

The company's quarterly numbers came on expected lines and it recorded quarter-on-quarter (QoQ) improvement on most parameters. Along with the numbers, the company also announced a share buyback of Rs 9,500 crore.

October 14, 2020 / 02:18 PM IST

IT player Wipro, on October 13, reported a consolidated profit of Rs 2,465.7 crore for the July-September quarter.

The company's quarterly numbers came on expected lines and it recorded quarter-on-quarter (QoQ) improvement on most parameters. Along with the numbers, the company also announced the share buyback of Rs 9,500 crore.

Here are 5 key takeaways from Wipro's Q2 earnings:

The numbers: Consolidated profit increased to Rs 2,465.7 crore for the quarter compared to Rs 2,390.4 crore in the previous quarter.

Consolidated revenue during the quarter increased 1.2 percent sequentially to Rs 15,096.7 crore.

The IT services segment, which is widely tracked by analysts, witnessed a 3.7 percent quarter-on-quarter growth in revenue at $1,992.4 million in Q2. Non-GAAP constant currency IT Services segment revenue increased by 2 percent QoQ, said Wipro in its BSE filing.

Read more: Wipro Q2 profit up 3.2%

Buyback: The board of directors approved a buyback proposal, subject to the approval of shareholders through postal ballot, for purchase of up to 23.75 crore equity shares of Rs 2 each (representing 4.16 percent of the total paid-up equity capital) from the shareholders of the company on a proportionate basis by way of a tender offer.

The buyback price is Rs 400 ($5.41) per equity share payable in cash for an aggregate amount not exceeding Rs 9,500 crore ($1.3 billion).

Outlook for Q3: The company expects revenue from its IT services business to be in the range of $2,022 million to $2,062 million. This translates to a sequential growth of 1.5 percent to 3.5 percent.

Acquisition of Eximius Design: The company said that it has signed a definitive agreement to acquire Eximius Design, a leading engineering services company with strong expertise in semiconductor, software and systems design.

"Eximius enables Wipro to strengthen market leadership in VLSI and systems design services by expanding our market presence and strengthening our technical leadership in the semiconductor ecosystem, to help accelerate silicon innovation for our customers. We are pleased to welcome Eximius' employees and look forward to helping our customers innovate at scale and deliver next-generation connected products, faster," said Harmeet Chauhan, Senior Vice President, Industrial & Engineering Services, Wipro.

Management commentary: Commenting on the company's September quarter performance, Thierry Delaporte, CEO and Managing Director, Wipro, said: "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."

Jatin Dalal, Chief Financial Officer, said: "It was another quarter of strong performance on margins and cash flows. We improved on several operating parameters to deliver margin expansion of 0.2 percent to 19.2 percent in the IT Services segment. Our free cash flows as a percentage of net income for the first half were at 160.7 percent of net income. The announcement to buyback equity shares is part of our philosophy to deliver consistent returns to shareholders."

Moneycontrol News
first published: Oct 13, 2020 04:34 pm