Shares of IT major Wipro slipped 8% in early deals on Monday after IT firm reported its Q1 earnings. Wipro logged a 5.21 per cent year-on-year (YoY) rise in consolidated net profit at Rs 3,036.60 crore in Q1 compared with Rs 2,886 crore in the same quarter last year. Revenue fell 3.79 per cent to Rs 21,963.80 crore in the June 2024 quarter against Rs 22,831 crore in the corresponding quarter last year. Wipro's IT service revenue came in at Rs 21,896 crore.
In the current session, the Wipro stock fell 7.87% to Rs 513.35 on BSE. Market cap of Wipro slipped to Rs 2.69 lakh crore on BSE. Total 5.82 lakh shares of the firm changed hands amounting to a turnover of Rs 30.12 crore on BSE.
In terms of technicals, the relative strength index (RSI) of Wipro stands at 67.3, signaling the stock is neither oversold nor overbought. The IT stock is trading higher than the 50 day, 100 day, 150 day, 200 day but lower than the 5 day, 10 day and 20 day moving averages.
The IT firm sees September quarter revenue from IT Services business segment to be in the range of $2,600 million to $2,652 million. This amounts to a sequential guidance of minus 1 per cent to 1 per cent in constant currency terms.
In dollar terms, the IT services segment revenue fewll 1.2% to $2,625.9 million, sequentially and 5.5 per cent YoY. In constant currency (CC) terms, IT Services segment revenue slipped 1 per cent QoQ and 4.9 per cent YoY. Wipro said its IT services operating margin stood at 16.5 per cent, up 0.1 per cent QoQ and 0.4 per cent YoY.
Brokerage Nuvama has assigned a price target of Rs 557 to the stock.
"Wipro’s soft start to the year leaves much to be desired. While we do see signs of gradual improvements, especially in consulting, BFS and consumer, we believe the path to industry average growth is a long one. We continue to anticipate Wipro to underperform peers while its inexpensive valuation and high dividend yield limit the downside potential. Retain ‘HOLD/SN,” said Brokerage Nuvama.
Choice Broking is bearish on the IT stock. It has assigned a REDUCE call with a revised target price of Rs 558.
“Wipro has made substantial investments to strengthen its capabilities across the organisation. The investments in AI360 ecosystem, combined with the strategic value the consulting business brings to clients will help Wipro to stay competitive, resilient and a preferred partner for its clients. With significant upward stock movement over the last month, we downgrade our rating to REDUCE with a revised target price of INR558, implying a 22x PE on FY26E EPS of Rs 25.3,” said Choice Broking.
Brokerage Motilal Oswal has a neutral call on the IT stock. It has cut its price target by 10% to Rs 500.
"We expect the company to deliver FY24-26E IT Services revenue CAGR of 1.4%. We expect Wipro to clock 16% operating margin in FY25, which should translate into an 8.0% CAGR in INR PAT over FY24-26. We have cut our FY25E EPS by 1% and kept FY26E EPS broadly unchanged after its 1Q print. We reiterate our Neutral rating as we view the current valuation as fair. Our price target implies 20x FY26E EPS," said Motilal Oswal.