On the BSE, Wipro’s stock dropped 7.87% to Rs 513.35. On the BSE, Wipro’s market value decreased to Rs 2.69 lakh crore.
After the IT company released its Q1 earnings on Monday, shares of the large IT company Wipro fell 8% in early trading. In Q1, Wipro’s consolidated net profit increased by 5.21 percent year over year (YoY) to Rs 3,036.60 crore from Rs 2,886 crore in the same quarter the previous year. Compared to the same quarter last year, when revenue was Rs 22,831 crore, it decreased 3.79 percent to Rs 21,963.80 crore in the June 2024 quarter. Wipro made Rs 21,896 crore from IT services.
The Wipro stock decreased 7.87% to Rs 513.35 on the BSE during the current session. On the BSE, Wipro’s market value decreased to Rs 2.69 lakh crore. A total of 5.82 lakh of the company’s shares were traded on the BSE, generating a turnover of Rs 30.12 crore.
Technically speaking, Wipro’s relative strength index (RSI) is 67.3, indicating that the stock is neither overbought nor oversold. Comparing the IT stock to the 50-, 100-, 150-, and 200-day moving averages, it is trading lower than the five-, ten-, and twenty-day moving averages.
According to the IT company, the IT Services business sector will generate between $2,600 million and $2,652 million in sales in the September quarter. In constant currency terms, this translates to a sequential guidance of minus 1% to 1%.
The IT services segment sales decreased 1.2% in dollars, either sequentially or YoY, to $2,625.9 million. Revenue for the IT Services segment decreased by 1% on a quarterly basis and by 4.9% on an annual basis in constant currency (CC). According to Wipro, their operating margin for IT services was 16.5%, an increase of 0.4% year over year and 0.1% quarter over quarter.
The stock has a price objective of Rs 557 set by brokerage Nuvama.
“Wipro’s lackluster start to the year is somewhat disappointing. Even if we do see some indications of slow progress, particularly in the consultancy, BFS, and consumer sectors, we think it will take some time for the industry average to climb. While its low valuation and strong dividend yield restrict the downside possibilities, we still expect Wipro to underperform rivals. Hold onto “HOLD/SN,” Brokerage Nuvama advised.
Choice Broking’s view of the IT stock is negative. A REDUCE call has been assigned, with a revised target price of Rs 558.
“Wipro has significantly increased its organizational capacities through investments. Wipro will be able to maintain its competitiveness, resilience, and status as a client’s first choice thanks to its investments in the AI360 ecosystem and the strategic value the consulting firm provides to customers. Choice Broking stated, “We lower our recommendation to REDUCE with a reduced target price of INR558, representing a 22x PE on FY26E EPS of Rs 25.3, given the substantial upward movement in the company over the last month.
Regarding the IT stock, brokerage Motilal Oswal has a neutral call. Its price goal of Rs 500 has been lowered by 10%.
“We anticipate a 1.4% CAGR in IT services revenue for the company in FY24–26E. We predict that Wipro will record an operating margin of 16% in FY25, which should result in an 8.0% CAGR in INR PAT between FY24 and FY26. Following its 1Q print, we reduced our FY25E EPS by 1% while mostly maintaining our FY26E EPS. Since we think the present valuation is reasonable, we maintain our Neutral rating. Motilal Oswal stated, “Our price target implies 20x FY26E EPS.”
