IT stocks slide after Wipro's weak Q4 show; TCS slips 2% ahead of results

Infosys was trading nearly 4 per cent lower at Rs 614.75 while Tech Mahindra was down over 3 per cent

Shares of information technology (IT) companies were trading in the negative territory on Thursday, a day after Wipro posted muted growth in its revenue and profit numbers for the fourth quarter of the last financial year, as the ongoing Covid-19 crisis created disruption in both the operation and demand fronts. Even growth in top line remained weak for the entire FY20.

At 09:37 am, the Nifty IT index was trading 2.57 per cent lower at 12,375.70 levels with 9 out of 10 constituents trading in the red. While Wipro was trading 0.72 per cent lower at Rs 185.20 apiece, other IT firms took a deeper cut. For instance, Tata Consultancy Services (TCS) was trading 2.4 per cent lower at Rs 1,693.80. The IT major is scheduled to announce its March quarter results for the financial year 2019-20 later in the day. READ MORE

Infosys was trading nearly 4 per cent lower at Rs 614.75, Tech Mahindra was down over 3 per cent at Rs 521.55 and HCL Technologies was trading nearly 2.5 per cent lower at Rs 467.05 apiece. 

Among midcaps, Mindtree was down nearly 3 per cent at Rs 749.55. 

On Wednesday, Wipro posted a 6.3 per cent year-on-year (YoY) decline in its net profit at Rs 2,326.1 crore. On a sequential basis, the numbers slipped 5.28 per cent. Gross revenue for the firm stood at Rs 15,711 crore, up 4.69 per cent as against the same period last year.

IT services revenue, which accounts for more than 95 per cent of Wipro's gross revenue now, was at $2.073 billion, a decline of 1 per cent on a sequential basis. The actual revenue fell to the lower end of the company's earlier guidance.

Owing to the uncertainty around the course of the Covid-19 pandemic, the IT company refrained from giving any revenue guidance for the first quarter of the financial year 2020-21 (FY21). 

"Due to the uncertainty around the course of the Covid-19 pandemic, we do not have visibility into the extent to which it will disrupt our operations, and we have decided to not provide revenue guidance for the quarter ending June 30. We anticipate that we will resume providing revenue guidance when we have increased certainty of both demand- and supply-side factors," the press release said. READ MORE