Wipro shares fell as much as 4% to their day's low of ₹202 on the NSE on Friday after reporting a 2% fall in consolidated net profit at ₹3,502 crore in the fourth quarter, as reported by The Economic Times. Despite the share price decline, the company's board approved a ₹15,000-crore share buyback through a tender offer, as reported by CNBC TV18, The Economic Times, ET Now, Upstox, and The Times of India. The buyback will be executed at a ₹250 per share price, representing a 19% premium to the company's closing price on Thursday. This substantial buyback program demonstrates the company's commitment to returning value to shareholders through a structured tender offer mechanism. The buyback will repurchase 60 crore equity shares, representing 5.7% of Wipro's total paid-up equity share capital. According to The Economic Times, this marks the first such action announced by the IT major in more than three years, highlighting the significance of this capital return initiative.
For the fourth quarter of FY2026, Wipro expects to grow between -2% to 0% in constant currency terms for the first quarter of financial year 2027 on a sequential basis, as reported by CNBC TV18. This figure aligns with analyst projections from brokerages including CLSA, JPMorgan, Morgan Stanley, UBS who projected the figure to be negative 2% to 0%, while Nomura and Citi saw the growth guidance figure between -1% to +1% in constant currency terms. The IT services business segment is projected to be in the range of $2,597 million to $2,651 million, which implies the sequential guidance of -2% to 0% in constant currency terms. The Economic Times reports that Wipro reported a 2% fall in consolidated net profit at ₹3,502 crore for the March-ended quarter, while revenue from operations rose 8% year-on-year to ₹24,236 crore. As per ET Now, the company's profit after tax declined 1.84% year-on-year to ₹3,522 crore compared to ₹3,588 crore a year ago, while profit rose 12% sequentially. Revenue from operations increased 7.69% to ₹24,236.3 crore in Q4 FY26, up from ₹22,504.2 crore in the same quarter last year, and rose 2.88% sequentially. However, Reuters reports that net profit fell even more—8.6% to $1.4 billion for the full year FY26, with revenue declining 0.32% year-on-year to $10.48 billion, though this was better than the $9.94 billion estimated by a Bloomberg poll of 38 analysts.
The core IT services segment showed limited traction during Q4 FY26, with revenue standing at $2.65 billion, growing just 0.6% quarter-on-quarter and 2.1% year-on-year, as reported by The Economic Times. On a constant currency basis, IT services revenue rose 0.2% sequentially but declined 0.2% on an annual basis, highlighting weak underlying demand. This performance reflects the challenging market conditions facing the IT services sector and Wipro's ability to maintain relatively stable growth despite headwinds. The modest growth in the IT services segment underscores the need for the company's strategic capital return initiative through the substantial buyback program. The Times of India reports that IT services revenue for the March quarter rose 0.2% sequentially in constant currency and declined 0.2% year-on-year in reported terms, with revenue increasing 0.6% sequentially to $2.6 billion and growing 2.1% year-on-year. For FY26, Wipro's IT services revenue declined 0.3% in dollar terms to $10.4 billion and fell 1.6% in constant currency. Wipro reported IT services operating margin at 17.3%, declining 0.3% sequentially and 0.2% YoY, indicating continued cost pressures and investment-led drag. Operating cash flow stood at ₹3,170 crore, down 15% YoY, though it remained strong at 90.1% of net income for the quarter. Most of the revenue decline in FY26 came from consumer companies, which accounts for nearly a fifth of its revenue, with the company losing $80 million from these companies, which is more than double its revenue decline of $33.4 million.
Global brokerages have responded with mixed reactions to Wipro's Q4 performance, with Morgan Stanley maintaining an Underweight rating and cutting its target price to ₹192 from ₹242, while Goldman Sachs maintains a Sell rating with a target of ₹187. Nuvama maintains a Buy rating with a target of ₹255, citing the company's guidance on soft Q1FY27 revenue growth of -2% to 0% in constant currency terms. Emkay maintains a Reduce rating with a target of ₹210, highlighting concerns about the company's revenue miss and softness in BFSI and healthcare segments. The brokerage noted that Wipro aspires to maintain margins in a narrow band over the medium term, with EBIT margins in Q1 likely to face headwinds from two incremental months of salary hike and integration of low-margin acquisitions. Despite the strong margin beat in Q4, analysts remain cautious about the company's ability to achieve sustained growth, with Morgan Stanley flagging a potential fourth straight year of revenue decline and Goldman Sachs cutting revenue and earnings estimates for FY27-28. The ₹15,000-crore buyback represents the company's largest repurchase offer to date, surpassing its ₹12,000 crore repurchase carried out in 2023, though it remains below recent competitors' offers. ET Now reports that both Morgan Stanley and Goldman Sachs targets are well below the ₹250 buyback price, highlighting a disconnect between capital return optics and earnings confidence.
According to ET Now, Wipro has announced six buybacks over the past 10 years, consistently using large capital returns to support shareholder value. However, historical data shows a clear pattern where stocks typically rally between the announcement and record date, stabilise or dip after the buyback closes, and rarely trade at or above the buyback price for a sustained period. The stock typically trades around the offer price during the buyback window, which typically remains open for 15 days to a month. ET Now cites specific examples: 2023 buyback at ₹445: Stock traded around ₹388 on record date and rose briefly to ₹397 post closure, 2019 buyback at ₹325: Shares fell to ₹256 after the buyback ended, 2017 buyback at ₹320: Stock hovered near ₹300 post closure, and 2016 buyback at ₹625: Shares closed around ₹560 post buyback. The notable exception was the 2020 cycle, when the stock surged sharply from ₹352 at record date to ₹467 in early 2021, though this rally coincided with a global IT re-rating during the post-COVID digital spending boom rather than being driven solely by the buyback. ET Now suggests that buybacks have historically acted as downside protection tools, not price-discovery mechanisms that pull Wipro stock toward the offer price, with the ₹250 offer price being lower in absolute terms than earlier cycles, making the percentage upside appear larger but with a weaker fundamental backdrop.
