Wipro Ltd., the Bengaluru-based IT services giant, is all set to announce its September quarter results on October 17. This highly anticipated update will also include the declaration of a bonus share issue, marking the first such issuance by the company in four years. The company revealed this information in an exchange filing on Sunday, October 13.

Wipro's Bonus Share Issuance History

This latest bonus share issue will be Wipro's first since 2019, when it issued one bonus share for every three shares held by its shareholders. Wipro stands out among Nifty and non-Nifty constituents for having issued the highest number of bonus shares in its long history as a public company. In total, Wipro has issued bonus shares 13 times. The company first issued bonus shares in 1971, and has continued this practice in 1981, 1985, 1987, 1989, 1992, 1995, 1997, 2004, 2005, 2010, 2017, and most recently in 2019.

The record date for the new bonus share issue is yet to be determined. Wipro will announce this date at the end of its two-day board meeting held in conjunction with its earnings release.

Focus on Revenue Guidance for the Upcoming Quarter

While the bonus share announcement has caught the market's attention, another major point of interest is Wipro's guidance on revenue growth for the upcoming quarter. Brokerage firm Kotak Institutional Equities expects Wipro to guide for a revenue decline of 0.5% to a potential growth of 1.5% for the next quarter. This guidance will provide investors with a clearer view of Wipro’s financial health and the outlook for its business in an uncertain economic environment.

Wipro's Stock Performance

Wipro shares closed 0.7% higher at ₹528.45 on Friday, October 13, signaling cautious optimism from investors ahead of the earnings and bonus announcement. However, despite this uptick, Wipro's stock has declined by 4% over the past month, reflecting broader market concerns regarding the IT sector's growth prospects amid macroeconomic challenges.

Wipro's Legacy of Bonus Shares

Issuing bonus shares has long been part of Wipro's strategy to reward its shareholders. Historically, this method helps increase liquidity and makes the stock more affordable for small investors. The company's decision to once again issue bonus shares reinforces its commitment to returning value to shareholders, especially in a time when the IT industry faces increasing scrutiny regarding revenue growth and profitability.

Given Wipro’s extensive bonus share issuance history, long-term shareholders have benefitted from these corporate actions, further enhancing their holdings over the decades. Wipro's record of issuing bonus shares is unmatched, and its shareholders are keenly awaiting the specifics of the upcoming bonus announcement.

Market Outlook

With Wipro's Q2 results and bonus share announcement coming up, the market will be closely watching how the company's revenue performance aligns with expectations. Wipro’s management’s guidance for the next quarter could either allay or amplify investor concerns about the company's growth trajectory in the face of global IT demand volatility.

The IT services sector has faced headwinds in recent times, with inflationary pressures and global economic uncertainties affecting client budgets and projects. Investors are also keen to understand how Wipro plans to navigate these challenges and sustain its growth momentum.

Conclusion

Wipro's upcoming earnings report and the eagerly anticipated bonus share issuance are set to be key moments for both investors and market analysts. As the company prepares to release its September quarter financials, the focus remains squarely on how it manages shareholder expectations with bonus share allocations and its revenue guidance for the upcoming quarter.

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