finance news

Wipro shares dip over 6% after posting a 9% fall in September quarter

Date: October 14, 2022 Meghna Singh Meghna Singh
Wipro shares dip over 6% after posting a 9% fall in September quarter 
Shares of Indian IT giant, Wipro, tanked almost 6% during Thursday’s trading after the group reported a contraction in its July-September quarter earnings.



The poor quarterly performance has made many brokerage firms pessimistic or cautious about the quarter. Amid the muted guidance and conservative management approach, many believe that the worst for the stock is not yet over.



Contrary to the predictions made by Dalal Street, Wipro's net profit plunged 9% to INR 2,659 crore (~$323 million) in Q2FY22 from INR 2,930.7 crore (~$357 million) in the same period last year.



On the flip side, operations revenue saw a 14.6% growth on-year and reached INR 22,539.7 crore (~$2.7 billion) from INR 19,667.40 crore (~$2.3 billion) a year earlier.



Global brokerage firm CLSA stated that Wipro’s results were in line with its estimates, indicating around an 18% upside in the counter from Thursday’s low and a target price of Rs 450 ($5.47)



However, Citi maintained its sell call on Wipro and kept a target price of Rs 370 ($3.50), adding that Q3 growth guidance would be below the estimations.



Motilal Oswal, a domestic brokerage, remained neutral on the counter and kept the target price at Rs 380 ($4.62), close to Wipro’s intra-day lows.



The firm stated that it believes the IT services firm might witness one of the lowest FY23 organic growth among Tier-I IT Services providers and a margin below the company’s medium-termed guided range.



Meanwhile, broker Nirmal Bang Institutional Equities maintained its sell rating on Wipro’s stock, keeping the target price at Rs 340 ($4.13).



The broker commented that the de-rating seen in the past year reflects the concerns on EPS estimates. He added that the IT firm’s large deal TCV of $1.85 billion in the first half of FY23, in association with its robust pipeline, gives hope for a double-digit CC revenue growth that the company has depicted in this fiscal year.



Bang further conveyed that there are no signs of a downshift and that only the market has changed, leading to uncertainties that have impacted the clients.



Source credit: https://economictimes.indiatimes.com/markets/stocks/news/wipro-crashes-6-after-q2-results-brokerages-see-more-pain-for-it-major/articleshow/94830685.cms

About the author

View All Posts

Meghna Singh

An English Literature graduate, Meghna Singh ventured into the profession of content development to incorporate her knack for writing articles across verticals including technology, healthcare, business, and alike for News Origins and Newsorigins. She has also completed her MBA in Tourism and worked as a content creator in the field of product development.