Wipro To Pay Rs 1 Interim Dividend On Per Equity, American Depository Shares; Fixes Record Date

Despite a seasonally soft quarter, Wipro has announced an interim dividend of Rs 1 on its per equity shares and American depositary shares. On Friday, Wipro also fixed the record and payment date for the same.

In its regulatory filing, Wipro said, "Interim dividend declared of Rs 1 ($0.0121) per equity share/ADS."

The face value of the interim dividend is Rs 2 each.

Wipro further fixed a record date of January 24, for determining its eligible shareholders for the benefit. The payment of the interim dividend will be made on or before February 10, 2024.

Last year, Wipro announced a 50% dividend amounting to Rs 1 each for the financial year 2022-23. Notably, Wipro has been paying lower dividends for the second consecutive financial year compared to a dividend payout of 250% or Rs 5 per share in FY22.

Nonetheless, Wipro has a strong track record of paying dividends consistently for the last five years. Also, as per Trendlyne data, Wipro declared up to 33 dividends since May 2000.

Currently, Wipro has a dividend yield of 0.21%. On BSE, Wipro's share price ended at Rs 465.45 apiece, up by 3.9% on Friday. Its market cap stood at Rs 2,43,167.25 crore.

Also, Wipro's American Depositary Receipts (ADR) listed on NYSE surged by 5.03% to $5.64 in the pre-market of January 12.

Wipro is the fourth largest IT company in India in terms of market share following HCL Tech, Infosys and TCS.

Generally, dividends reflect a company's potential and ability to share a portion of its net profits from the respective financial year with its shareholders. They are paid to those eligible shareholders who hold the dividend-paying stock at the specified date. But notably, dividends vary into three categories, interim, special and final.

To be eligible for Wipro dividends, investors need to hold the company's ADRs and stock prices by the end of January 24, 2024.

An ADR is a security that represents shares of non-U.S. companies that are held by a U.S. depositary bank outside the United States ("U.S."). ADRs allow U.S. investors to invest in non-U.S. companies and give non-U.S.-companies-easier-access to the U.S. capital markets. Many non-U.S. issuers use ADRs as a means of raising capital or establishing a trading presence in the U.S.

As per Trendlyne data, the consensus recommendation from 38 analysts for Wipro is SELL. However, the company's EPS is expected to grow by 0.4% in FY24. The company's Debt to Equity Ratio of 0.19 is less than 1 and healthy, implying that its assets are financed mainly through equity. While its Interest Coverage Ratio is 18.97, higher than 1.5, meaning that it is able to meet its interest payments comfortably with its earnings (EBIT).

Further, Wipro's Return on Equity(ROE) for the last financial year was 14.61%, which is in the normal range of 10% to 20%. Also, its Price to Earning Ratio is 20.91, lower than its sector PE ratio of 75.85.

In Q3FY24, Wipro registered a consolidated net profit, attributable to owners, to Rs 2,694.2 crore, down by 11.75% YoY but up by 1.81% QoQ. Meanwhile, rupee revenue came in at Rs 22,205.1 crore in Q3FY24, registering a drop of 4.41% YoY and 1.38% QoQ. In constant currency, the IT Services segment revenue decreased by 1.7% QoQ. Meanwhile, in dollar terms, this segment's revenue was at $2,656.1 million, a decrease of 2.1% QoQ.