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Published: October 15, 2024
Updated: October 15, 2024

Wipro Announces First Bonus Issue Since 2019: A Look at the Company's History of Bonus Shares

Wipro's Latest Bonus Issue

Wipro, the IT services giant, has announced its first bonus issue since 2019, offering shares in the ratio of 1:1. This marks a significant event for shareholders, as the company has a long-standing history of issuing bonus shares over the years. The latest announcement came alongside the company's quarterly results, adding another chapter to its track record of rewarding investors.

A History of Bonus Shares

This is not the first time Wipro has announced a bonus issue. In fact, the company has declared a total of nine bonus share issuances to date. The most recent was in 2019, when Wipro offered shares in a 1:3 ratio, with the stock going ex-bonus on March 6, 2019. Prior to that, Wipro announced a 1:1 bonus share issue in 2017. The company has consistently rewarded shareholders, including bonus shares in 2010 (2:3), 2005 (1:1), and 2004 (2:1). Wipro also issued bonus shares in the ratios of 2:1 in 1997, 1:1 in 1995, and 1:1 again in 1992.

Financial Performance in Q2 FY25

Wipro also shared its financial results for the September quarter, showing a 21.26% year-on-year (YoY) increase in consolidated net profit, reaching ₹3,209 crore. This was a notable improvement over the ₹2,646.30 crore profit recorded during the same period last year, surpassing market expectations.

However, the company's revenue from operations dipped slightly by 0.95% to ₹22,301.6 crore, down from ₹22,515.9 crore in the previous year. Despite this slight decline, the IT services segment reported a 1.3% quarter-on-quarter (QoQ) growth, with margins expanding by 35 basis points. Large deal bookings reached $1.5 billion, the highest in the last 10 quarters.

Outlook for Q3 FY25

Looking ahead, Wipro expects its IT services revenue for the third quarter to be between $2,607 million and $2,660 million, representing a projected growth rate of (-) 2% to 0% in constant currency terms.

Operational Improvements and Strong Cash Flow

The company reported strong operational performance, with margins expanding and earnings per share (EPS) growing 6.8% QoQ. Wipro's operating cash flow remained robust, amounting to 132.3% of net income for the second quarter. Cumulatively, Wipro has generated nearly $1 billion in operating cash flow in the first half of the current fiscal year.

Wipro’s announcement of a 1:1 bonus share issue, along with its strong financial performance in Q2 FY25, highlights the company’s commitment to rewarding shareholders. With consistent growth in large deal bookings, strong cash flow, and operational improvements, Wipro continues to build on its legacy as a leading IT services company while keeping investor interests at the forefront.