January 15, 2023
New Delhi, India
Wipro’s SharesSurges After Q3
In a surprising turn of events, Wipro’s shares experienced a significant surge of 13%, reaching a 52-week high after the announcement of its Q3 results. While the market initially responded positively, several concerns persist, indicating a complex scenario in the IT sector.
Positive Momentum Despite Profit Dip
Despite a 12% YoY decline in net profit and a 1.2% sequential drop, Wipro‘s stock soared as its Q3 results surpassed market estimates. The surge was also mirrored in the company’s American Depository Receipts (ADRs), reaching a near-20-month high.
Consistent Profit Decline Raises Eyebrows
Wipro’s Q3 performance marks the fourth consecutive quarter of declining profits on a YoY basis. Analysts express concerns over this consistent trend, and market experts anticipate the underperformance to persist.
Revenue Challenges in Constant Currency Terms
The company’s consolidated revenue from operations witnessed a 4.4% YoY and 1.4% QoQ decline. In constant currency terms, revenue dropped by 1.7% QoQ and 6.9% YoY, posing challenges for the company in the competitive IT landscape.
Guidance for Q4 and Expectations
Wipro’s guidance for Q4FY24 signals a cautious outlook, with an expected sequential revenue decline ranging from -1.5% to +0.5% in constant currency terms. This guidance has led market experts to anticipate continued challenges for the company.
CEO’s Perspective and Positive Signals
Thierry Delaporte, CEO and Managing Director of Wipro, acknowledged the seasonally soft quarter but highlighted strong deal booking momentum. Positive signs of growth in consulting were evident with double-digit growth in order bookings in the Capco business.
Market Reaction and Sector-Wide Impact
Following Wipro‘s surge, the entire Nifty IT index experienced a 2.5% jump, with other IT peers like Tech Mahindra, HCL Tech, TCS, and Infosys also seeing increases in their stock prices. This positive market reaction hints at a broader sector-wide impact.
Check All Q3 Results
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