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Business News/ Market / Stock-market-news/  Wipro shares plunge 7% on weak June quarter guidance
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Wipro shares plunge 7% on weak June quarter guidance

Among the top five Indian IT firms, Wipro was the only one not to post double-digit full-year revenue growth

Wipro chief executive T.K. Kurien said that the company’s growth trajectory for the fiscal year ending March 2015 remains intact and will not be impacted by a weak first quarter. Photo: Hemant Mishra/MintPremium
Wipro chief executive T.K. Kurien said that the company’s growth trajectory for the fiscal year ending March 2015 remains intact and will not be impacted by a weak first quarter. Photo: Hemant Mishra/Mint

Bangalore: Shares of India’s third largest software services exporter Wipro Ltd fell as much as 7.1% on Monday, after the Bangalore-based firm warned of a weak performance in the June quarter due to slower growth from its India business and lower spending by overseas clients in the retail and insurance sectors.

Last week, Wipro reported a strong performance in the March quarter that beat average market expectations, but forecast revenue in the range of $1.715 billion and $1.755 billion for the June quarter—a range between marginally negative and 2% sequential growth.

Wipro chief executive T.K. Kurien said that the company’s growth trajectory for the fiscal year ending March 2015 remained intact and would not be affected by a weak first quarter.

“For us, the way we see it, our growth trajectory remains intact for the full year. We don’t see that changing significantly," Kurien said in an interview on Friday, adding that Wipro would see a strong pickup from the second quarter.

“I don’t want to judge Q2 right now, but all I can say is wait for Q2," he added.

Among the top five Indian information technology (IT) firms, Wipro was the only one not to post double-digit full-year revenue growth for fiscal 2013-14, raising concerns on when the company would regain double-digit revenue growth. Wipro last posted double-digit growth in 2011-12.

“Management highlighted that its first-quarter guidance was impacted due to the weakness in India business and in verticals, such as retail, hi-tech and insurance. However, given the current order book, second quarter will likely witness a stronger growth rate versus first quarter as projects won in the fourth quarter start ramping up," said Bhuvnesh Singh of Barclays in a note dated 21 April.

Shares of Wipro closed 6.65% lower at 546.60 apiece on BSE on Monday, while the benchmark S&P BSE Sensex rose 0.60% to 22,764.83, a record high.

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Published: 21 Apr 2014, 10:43 AM IST
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