Wipro buyback: Rs 15,000 crore tender at Rs 250

ADR drop sets the tone ahead of Friday trade

Shares of Wipro Ltd may see weakness, after its American Depositary Receipt (ADR) fell 4.85% overnight. The move followed a June-quarter outlook that several brokerages described as underwhelming. Near-term growth expectations have been tempered by commentary around client trends and execution timing on large deals. The concerns have also extended to margins, with the Street factoring in near-term pressure from investments and ramp-ups.

June-quarter guidance points to flat-to-negative CC growth

Wipro guided for sequential constant currency (CC) revenue growth of minus 2% to nil for the June quarter. Jefferies said that management’s assumptions during the press meet implied that recent large deals and acquisitions would contribute for half the quarter at the midpoint. Based on that framing, Jefferies added that the organic business is likely to de-grow in the first quarter. Management attributed the weakness to account-specific issues in the Americas region and delays in large deal ramp-ups.

Client mix and US BFSI weakness cited as growth headwinds

Broker commentary highlighted a decline in top clients and weakness in the US BFSI segment as key near-term drags. BFSI is a major demand driver for large Indian IT services companies, so softness there tends to show up quickly in quarterly commentary. The Americas region was specifically referenced as an area facing account-level issues. Separately, delays in converting large deal wins into revenue were flagged as an important near-term execution issue.

Margins: pressure expected despite underlying resilience

Margins are expected to face near-term pressure due to investments and deal ramp-ups, according to brokerage notes. While such ramp-ups can support later growth, they can also bring transition costs in the short run. Even with these pressures, Nuvama Institutional Equities said Wipro’s margin “remains solid” in its assessment. The debate, for now, is less about the company’s ability to protect profitability and more about the timing of revenue conversion from signed deals.

Board approves Rs 15,000 crore buyback at Rs 250

Wipro’s board approved a share buyback of Rs 15,000 crore at Rs 250 per share. The buyback will be conducted through the tender offer route on a proportionate basis, in line with SEBI’s Buy-back regulations and the Companies Act. The company plans to repurchase up to 60 crore equity shares (face value Rs 2 each), representing 5.7% of its paid-up equity share capital. CFO Aparna Iyer said it is Wipro’s largest buyback and is expected to be completed in Q1 FY27, subject to shareholder approval.

Premium to market price and process milestones

The buyback price implies a 19% premium over Thursday’s closing price of Rs 210.15 per share on the NSE (another close cited was Rs 210.26). The record date to determine shareholder eligibility has not been announced yet. The proposal will be placed before shareholders for approval through a postal ballot process. Jefferies noted the premium is broadly in line with Wipro’s previous few buybacks.

How brokerages read the guidance and capital return

Jefferies highlighted the weak June-quarter CC guidance and indicated near-term margin pressure due to investments and deal ramp-ups. It also referenced Wipro’s dividend payout of Rs 11 per share over FY26, alongside the newly announced buyback. Jefferies suggested a target price of Rs 180 for the stock.

MOFSL said management expects normalisation from Q2, but added that near-term visibility remains limited due to ramp-up delays and seasonality. MOFSL reiterated a Neutral rating on Wipro with a target price of Rs 215, valuing the stock at 14x FY28E EPS.

Nuvama Institutional Equities said Wipro is likely to start FY27 on a soft note, but retained a ‘Buy’ view, citing valuation comfort and the sizeable buyback. Nuvama said it upgraded FY27E and FY28E estimates (up 6.8% and up 5%) due to a lower share count from the buyback and a higher USD-INR assumption (93 versus 88 earlier). It maintained a target price of Rs 255 (earlier Rs 240), valuing Wipro at 18x FY28E.

Morgan Stanley was cited as maintaining an Underweight stance, with one report noting a reduced target of Rs 192 from Rs 242.

Track record: earlier buybacks and market context

Wipro’s last buyback was in April 2023, sized at Rs 12,000 crore at Rs 223 per share, with a premium of 18%, and it bought back 4.91% of its equity. Before that, it bought back 4.16% at Rs 200 per share in October 2020, valued at Rs 9,500 crore, with a premium of 19%. It also repurchased 5.35% at Rs 163 per share, aggregating to Rs 10,500 crore, at a premium of 16%. Morgan Stanley’s view (as cited) said the buyback was largely anticipated, but timing uncertainty could drive a near-term positive reaction, while attention may shift back to the weak FY27 revenue growth outlook.

Key data points at a glance

Market impact and what investors will watch

The near-term stock reaction is likely to reflect two opposing forces: weak revenue guidance versus a large buyback at a material premium. The June-quarter CC guidance of -2% to 0% sets a cautious baseline for near-term growth expectations. Commentary around delays in deal ramp-ups and Americas account issues adds to the focus on execution rather than demand alone.

On the other side, the Rs 15,000 crore tender offer buyback, covering 5.7% of paid-up capital, provides a defined capital return framework and reduces share count if fully executed. The next milestones will be shareholder approval via postal ballot, announcement of the record date, and confirmation of timelines for completion in Q1 FY27.

Conclusion

Wipro’s guidance for the June quarter has raised fresh questions on near-term growth visibility, especially given deal ramp-up delays and cited weakness in US BFSI. At the same time, the board-approved Rs 15,000 crore buyback at Rs 250 per share introduces a significant capital return event. Investor focus is likely to remain on execution milestones for the buyback, alongside updates on deal conversions and regional account performance in the coming quarter.