Wipro Ltd. will be in focus on April 16 as the company's board meets to consider a share buyback alongside its fourth-quarter results, with investors also watching for the annual dividend announcement.
The meeting comes at a time when the company is holding a cash balance of Rs 41,510 crore as of the third quarter, the highest among the top five IT firms. Wipro has also said it will distribute more than 70% of its net income to shareholders between FY26 and FY28.
That has placed both capital return measures - buyback and dividend - at the centre of investor attention ahead of earnings.
Buyback Watch
The proposed buyback could be worth Rs 16,000 crore to Rs 18,500 crore, based on past trends, according to brokerages tracked by NDTV Profit.
Morgan Stanley kept an "Underweight" rating with a target price of Rs 242 and said the market had already been expecting a buyback.
"A potential buyback has been a move anticipated by the market," the brokerage said.
It estimated a buyback of about $2 billion, or roughly 8.5% of Wipro's current market capitalisation.
Wipro's earlier buybacks were launched at premiums of 16% to 19% over the prevailing market price. Based on the historical average premium of about 18%, current estimates indicate a possible buyback price near Rs 240 per share.
The company last carried out a buyback in April 2023 worth Rs 12,000 crore at Rs 223 per share, a premium of 18%. Earlier buybacks in October 2020 and April 2019 were priced at Rs 200 and Rs 163 per share, with premiums of 19% and 16%, respectively.
ALSO READ: Wipro Buyback Alert: All You Need To Know About IT Firm's First Share Repurchase In Three Years
Dividend Outlook
Alongside the buyback decision, investors will track whether Wipro raises its dividend meaningfully for FY26.
Bloomberg estimates place FY26 dividend expectations at Rs 10.56 per share. The highest estimate among analysts tracked by Bloomberg stands at Rs 17 per share, while the lowest is Rs 4 per share.
The company paid Rs 6 per share for FY25.
Market History
Morgan Stanley said Wipro shares have often responded after buyback announcements.
"During the past five buybacks, Wipro has outperformed the Sensex post a formal buyback announcement in four out of five instances over one week, and in three out of five instances over one month," the brokerage said.
It added that any near-term move after an announcement could later give way to a renewed focus on operating performance and earnings delivery.
ALSO READ: IT Q4 Results: Tech Mahindra, Coforge, Mphasis To Announce Quarterly Earnings, Dividend On This Date
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