Wipro said it expects revenue at its IT services business to be in the range of $2.02 billion to $2.06 billion in the December quarter
Shares of Wipro Ltd today fell as much as 6.8% to ₹350, a day after the software services firm posted quarterly organic revenue growth that disappointed some investors. Wipro also saw a decline in revenue from its key markets of the Americas and Europe in the second quarter as clients cut spending, but some new deals helped to keep overall revenue largely flat at ₹15,115 crore.
"Organic growth was down 4.5% year-on-year, lower than Accenture Plc (down 3%) and Tata Consultancy Services Ltd (down 3.2%)," AMP analysts said, according to Reuters. Quarterly profit also fell and missed analysts' estimates.
Wipro said it expects revenue at its IT services business to be in the range of $2.02 billion to $2.06 billion in the December quarter, lower than the $2.09 billion it earned a year earlier.
The company approved a ₹9500 crore share buyback at ₹400 per share.
"While the quantum of buyback was largely in line with our expectations, the buyback price was a disappointment," ICICI Securities said in a note.
Despite today's correction, Wipro shares have run-up sharply since hitting a 52-week low of ₹159 on 19 March.
Emkay Research has a hold rating on Wipro with target price of ₹360.
"Wipro made some progress in accelerating growth in the last few quarters but it is still not broad-based and consistent; and effect of changes in the business strategy under new leadership needs to be seen. Given rich valuations, we assume coverage on Wipro with hold and a target price of ₹360 at 18x Sept 22E earnings," the brokerage said.
Another brokerage Motilal Oswal maintain neutral stance on Wipro stock with target price of ₹385. "We upgrade our FY21/FY22E EPS by 3%/2%, largely led by a revised revenue outlook based on guidance. Maintain Neutral as we await further evidence of execution of Wipro’s refreshed strategy and a successful turnaround from its growth struggles over the past decade before turning more constructive on the stock," the brokerage said.
(With Reuters Inputs)
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