Wipro’s share price dips by over 6% after earnings — analysts believe it will take a while to catch up to TCS and HCL Technologies

Wipro’s share price dips by over 6% after earnings — analysts believe it will take a while to catch up to TCS and HCL Technologies
Wipro's share price dips by over 6% after earningsWipro
  • Wipro’s share price is down by over 6% after the company announced its second-quarter earnings post market hours yesterday.
  • This is despite Wipro posting stable earnings and its new CEO, Thierry Delaporte outlining the company’s top five priorities.
  • Analysts remain cautious, awaiting more details about Delaporte’s timeline and actionable items to execute this vision in the coming days.
Wipro share price is down by over 6% despite having posted stable quarterly earnings. The company’s revenue was 2% over the last three months in constant currency terms, and its profit saw a 3.2% increase.

Wipro’s share price dips by over 6% after earnings — analysts believe it will take a while to catch up to TCS and HCL Technologies
Wipro share price over the last one monthBSE/BI India

Wipro’s share price hit a 52-week high on Monday of ₹379 per share. So far this year, the stock has gained 52%.

Wipro’s share price dips by over 6% after earnings — analysts believe it will take a while to catch up to TCS and HCL Technologies
Wipro's share price since JanuaryBSE/BI India

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Wipro hasn’t always had the most smooth of transitions when it comes to changes in leadership. So, even with the company’s new CEO Thierry Delaporte outlining Wipro’s top five priorities with him at the helm, people want more information.

Brokerage on WiproTarget price
ICICI Securities₹ 435
Motilal Oswal Securities₹ 385
Nirmal Bang₹ 382
Kotak Institutional Equities₹ 380

Delaporte’s endeavour to catch up to its IT services peers like Tata Consultancy Services (TCS) and HCL Tech is commendable. Still, he needs to set out indicative timelines for quantified goals, according to Nirmal Bang.

“Executing on these priorities will entail a set of changes that will be known over the coming months. After a strong and partly buyback-fuelled rally in the stock price, upsides will be modest,” added Kotak Institutional Equities in its report. Simply put, Wipro’s valuation may have become a little expensive over the past month.
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Nonetheless, analysts expect to see quicker deals, more acquisitions and traction in digital revenues for Wipro even as they maintain caution.

“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,” said Motilal Oswal Securities.

Wipro also announced a share buyback plan of ₹9,500 crore and the acquisition of Eximius Design, a US-based engineering services company.
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