Abidali Neemuchwala, chief executive officer of Wipro Ltd., speaks during the HP Discover 2017 Conference at the Sands Expo and Convention Center in Las Vegas, Nevada, U.S. (Photographer: Jacob Kepler/Bloomberg)

Why Wipro Has Defied The Market Rout

It’s been a year of contrast for Wipro Ltd.

Shares of India’s third-largest software services provider lagged when its peers’ stocks surged and benchmark Nifty 50 rose to hit an all-time high on Aug. 28. Since then, information technology stocks have fallen and Nifty erased all gains to trade nearly 14 percent lower. But Wipro rose nearly 8 percent during the period, the only Nifty stock to do so.

One reason could be that Wipro was cheaper for investors to buy. Billionaire Azim Premji-founded information technology company’s stock traded at 17.1 times its earnings till August-end. That compared with a price-to-earnings multiple of 20.3 times for HCL Technologies Ltd., and 23.72 times and 25.48 times for Infosys Ltd. and Tata Consultancy Services Ltd., respectively.

Also, investors may be expecting another buyback, Urmil Shah, analyst at IDBI Capital, told BloombergQuint. “The company conducted buybacks in the past as well and they are open to returning capital to shareholders.”

Wipro repurchased shares twice in the last two years. It bought back shares worth Rs 2,500 crore in 2016 and Rs 11,000 crore in 2017. Wipro, according to its exchange filing, had a net cash balance of Rs 21,358 crore as of Sept. 30.

Watch the video here: