Wipro Share Price Today: Shares of IT major Wipro fell over 6 per cent in early trade today after the firm reported a 9.27 per cent year-on-year (YoY) fall in net profit for the quarter ended September. The share hit a fresh 52-week low of Rs 383 apiece on the BSE in Thursday’s early trading session. Wipro shares have lost 48 per cent from their 52-week high in comparison to the current market price.
The market cap of Wipro fell to Rs 2.11 lakh crore. A total of 4.21 lakh shares of the firm changed hands, amounting to a turnover of Rs 16.27 crore on BSE. The stock has declined 43 per cent in a year and lost 46 per cent in 2022.
The Bengaluru-based company’s revenue from operations stood at Rs 22,539 crore, up 14.6 per cent growth over Rs 19,667 crore in the previous year. Wipro in its outlook for the December quarter said it expects revenue from our IT services business to be in the range of $2,811 million to $2,853 million. This translates to a sequential growth of 0.5 per cent to 2 per cent.
In the September quarter, Wipro’s top 5 clients grew 19 per cent YoY, and the top 10 clients expanded 17 per cent YoY in constant currency terms.
“We achieved margins of 15.1 per cent in Q2 after absorbing the impact of salary increases and promotions. Our margin improvement was led by better price realisations and strong operational improvements in automation-led productivity. Our operating cash flows was robust and at 181 per cent of our Net Income for the year,” Wipro CFO Jatin Dalal said.
The IT major said its large deal bookings rose 42 per cent YoY in H1’23. The overall order book in Total Contract Value (TCV) terms grew 24 per cent YoY in Q2.
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“We lower our FY23/FY24 EPS estimate by 6 per cent/2 per cent to factor in a miss on growth and elevated risk. We maintain our Neutral stance as we view the current valuation as fair,” said domestic brokerage and research firm Motilal Oswal in a note.
The brokerage maintained its Neutral stance on Wipro shares with a target price of Rs 380 as it awaits further evidence of the execution of Wipro’s refreshed strategy, and a successful turnaround from its growth struggles over the last decade before turning more constructive on the IT stock.
Even Nomura has a ‘neutral’ call on the stock with a target price of Rs 380.
“Investors need to brace for near-term weakness as margin recovery is likely to be gradual. Guidance for Q3 is disappointing and alludes to slowdown. We cut FY23-24 EPS (earnings per share) estimates by 3-5 per cent,” it said in a note.
“Wipro reported a modest Q2 performance. The revenue growth and margins were both soft, but broadly in line with expectations. Q3 revenue growth guidance was disappointing. EBIT margins of 15 per cent in H1, with two months of wage hike impact yet to come (in Q3), means the company will not be able to report margins much above its declared floor of 15 per cent,” said PhillipCapital
Over the last eight quarters, Wipro’s margins have fallen by over 600 bps, primarily due to acquisitions like Capco and Rizing, which have led to a big reset at gross margin levels.
These acquisitions have also consumed significant cash – ruling out any buyback in near future. All that has not led to any significant outperformance on the growth front – as Wipro appears likely to report, below industry average growth in FY23, it highlighted.
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