Wipro declares 1:1 bonus issue, hints at share buyback; Q4 IT revenues rise 3.9% YoY; guidance for Q1 comes at $1,915-$1,955 million

Wipro gave a sweet surprise to shareholders on Tuesday (April 25, 2017) when it declared bonus shares in the ratio of 1:1 after a gap of seven years; the last bonus issue declared by the company was in 2010, in the ratio of 2:3. However, the company skipped final dividend for FY2017 and hinted at a share buyback programme three months from now. 

The IT revenue guidance for Q1, FY2018 came at $1,915-$1,955 million.

"The Board of Directors recommends issue of bonus shares to shareholders (including to ADS holders) in the ratio of one equity share for every one equity share held as on the record date to be decided, subject to approval of shareholders through postal ballot.

"The Board of Directors in its meeting held on January 25, 2017, had declared an interim dividend of Rs 2 per equity share for the year 2016-17. The Board recommend adoption of the interim dividend as the final dividend for the year 2016-17, thus, the total dividend for the year 2016-17 remains at Rs 2 per equity share.

"The Board of Directors will consider a proposal for buyback of equity shares of the Company around July 2017," the company said in a regulatory filing to the BSE.

Q4 performance

For the March 2017 quarter (Q4), IT revenues came at $1,954.6 million, an increase of 2.7 percent sequentially and 3.9 percent, YoY. The revenue was also higher than the guidance of $1,922-1,941 million for Q4 given by the company.  

Net profit for Q4 was Rs 2,267 crore ($349 million), up 7.19 percent from the December quarter (Rs 2,114.8 crore) while gross revenues rose 4.87 percent QoQ to Rs 15,033.8 crore. 

"We delivered revenues within the guidance range in our fourth quarter," Abidali Z. Neemuchwala, Chief Executive Officer and Member of the Board, said, adding, "We are confident that the recovery in Energy & Utilities and our demonstrated strength in digital will help us improve our growth trajectory during the course of the current financial year."

"We continue to maintain our focus on operational improvements and productivity enhancements," said Jatin Dalal, Chief Financial Officer, said in a statement.

Analysts' expectations

Nirmal Bang Institutional Equities (NBIE) had projected $1,934 million, translating into a sequential growth of 1.63 percent while IDBI Capital Markets & Securities had a bullish forecast, pegging Q4 IT revenues at $2,036 million. "We expect full quarter consolidation of Appririo to add ~$30mn of incremental revenue. We expect EBIT margin to remain steady with impact of full quarter consolidation of Appirio and INR appreciation to be offset by operational efficiencies," the brokerage said.

FY2017 results

For the full year ended March 2017, the company's net profit fell 4.7 percent YoY to Rs 8,490 crore ($1.3 billion) while revenues rose 7.4 percent YoY to Rs 55,040 crore ($8.5 billion).

For the third quarter ended December 2016, Wipro had reported 5.7 percent fall in net profit to Rs 2,109.6 crore while total income in Q3 came at Rs 13,764 crore in comparison to Rs 12,952 crore for the year-ago period.

Hiring and attrition

The company's headcount rose to 181,482 as of March 31, 2017 from 1,79,129 employees at the end of December 2016. The IT services saw a net addition of 1,305 employees, taking the strength to 1,65,481 employees from 1,64,176 as of December 31, 2016. 

Shareholding pattern

Azim Premji, his family members and associate firms falling under "promoter and promoter group" held 178 crore shares, or 73.25 percent, of the paid-up equity share capital as of March 31, 2017.

Foreign portfolio investors held 10.19 percent, mutual funds 2.52 percent and LIC 2.54 percent. 

Comparison of Q4 revenues and net profit for Wipro, TCS and Infosys: