Wipro shares recover 9% from 52-week low; technical analysts suggest Rs 400-plus target in near term

Shares of Wipro Ltd settled 2.89 per cent higher in the previous trading session on Friday. On a year-to-date (YTD) basis, the stock has declined 2.02 per cent compared to a 0.09 per cent dip in the benchmark BSE Sensex. That said, the counter has climbed 9.46 per cent from its 52-week low of Rs 351.85, a level seen last month on April 17. The scrip has, however, plunged 27.33 per cent from its one-year high of Rs 530, hit on April 29 last year.

On the earnings front, the IT company's net profit slipped 0.40 per cent to Rs 3,074.50 crore in the March quarter (Q4 FY23) as against Rs 3,087.30 crore in the same period last year. Although, revenue for the quarter rose 11.17 per cent to Rs 23,190.30 crore compared to Rs 20,860 crore in the year-ago quarter.

Wipro also approved a share buyback of up to Rs 12,000 crore.

Technical analysts hinted at a Rs 400-plus upside in the near term. Support on the counter could be seen at Rs 370, followed by Rs 365 levels.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Recently the counter has seen bullish divergence on daily charts. The stock is currently trading well above its previous swing high of Rs 379. One can add Wipro here with an upside of Rs 420 and the stop-loss would be at Rs 365."

Rajesh Bhosale, Technical Analyst at Angel One, said, "Despite being an underperformer, Wipro has recently shown strong positive momentum with high volumes and corporate action following a two-month base formation at the Rs 360-350 levels. Our outlook on this stock is positive, with the possibility of retesting the 200-SMA (Simple Moving Average) at the Rs 400 level in the short term. If the stock sustains trade beyond this level, it could experience further positive traction toward Rs 420. Currently, strong support for the stock is observed around the Rs 370-365 zone."

AR Ramachandran from Tips2trades said, "Despite average Q4 FY23 results, a proposed buyback offer has led to a strong uptrend in Wipro with strong support at Rs 370 on the daily charts. A daily close above resistance of Rs 393 could lead to targets of 402-413 in the near term."

Wipro traded higher than the 5-day, 20- and 50-day moving averages but lower than the 100-day and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 61.19. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 23.03. It has a price-to-book (P/B) value of 3.37.

The stock has an average target price of Rs 420.08, Trendlyne data showed, suggesting a potential upside of 9.11 per cent. The scrip has a one-year beta of 1.13, indicating high volatility.

Meanwhile, Indian equity benchmarks remained closed today on account of Maharashtra Day. In the previous session, the domestic benchmarks extended their gains for the seventh straight session. The 30-share benchmark Sensex pack surged 463 points, or 0.76 per cent, to settle at 61,112 on Friday, while the broader NSE Nifty index closed 150 points, or 0.84 per cent, up at 18,065.

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