Wipro slips 2%, hits 11-month low ahead of Q4 results

Shares of Wipro hit an eleven-month low of Rs 510.55, down 2 per cent on the BSE in Friday’s intra-day trade, ahead of its January-March quarter (Q4FY22) result later in the day. The stock of the information technology (IT) company hit its lowest level since May 2021.

In the past one month, Wipro has underperformed the market by falling 15 per cent as compared to 0.21 per cent decline in the S&P BSE Sensex. The stock has corrected 31 per cent from its 52-week high level of Rs 739.80, touched on October 14, 2021. It had hit a 52-week low of Rs 477.80 on May 4, 2021.

Wipro had guided for 2-4 per cent constant currency (CC) growth in Q4 for IT services. "We expect the company to report 3.5 per cent QoQ CC growth in revenues in IT services. We expect dollar revenue growth of 3.2 per cent QoQ, factoring in 30 bps cross currency headwind," ICICI Securities said in a result preview report.

Besides, the company is expected to report 2.7 per cent QoQ rupee growth. Earnings before interest and tax (EBIT) margins in global IT services are expected to decline by 30 bps QoQ, due to impact of salary hike amid higher attrition. Overall EBIT margins are expected to decline 20 bps QoQ due to weak performance in IT services. Consequently, PAT is expected to be flattish QoQ, the brokerage firm added.

"The commentary on recent M&A, deal wins, vertical commentary, commentary of client’s IT budget and revenue guidance are key to watch," it added.

Analysts at Emkay Global Financial Services, meanwhile, have a 'Buy' rating on Wipro with a target price of Rs 670 as the recent acquisition of Rizing to strengthen the company’s SAP consulting capabilities.

"Rizing is Wipro's sixth acquisition since the beginning of CY21 and is line with the company’s growth agenda. The acquisition will strengthen Wipro’s SAP practice by leveraging Rizing’s SAP consulting capabilities, industry expertise, and existing client relationships. Rizing will become a critical extension of Wipro's SAP Cloud practice and Wipro FullStride Cloud Services," the brokerage firm said in a company note.