Wipro Shares Surge 10% to 52-Week High

15 Jan 2024 , 10:01 AM

On January 15, Wipro witnessed a remarkable surge of 10%, reaching a fresh 52-week high, propelled by better-than-expected earnings for the December quarter. The American Depository Receipts (ADRs) of the company also soared by nearly 18%, hitting a near-20-month high of $6.35 following the announcement of its results on January 12.

While Wipro’s net profit experienced a 12% year-on-year decline to Rs 2,694 crore, the consolidated revenue stood at Rs 22,205 crore, reflecting a 4.4% decrease compared to the previous year. This marks the fourth consecutive quarter where Wipro reported a YoY profit decline. Analysts anticipate Wipro to continue underperforming its peers, attributing this trend to the unusually low correlation between its deal wins and top-line growth.

As of 9:16 am, Wipro shares were trading nearly 10% higher at Rs 511.95 on the National Stock Exchange (NSE). The third quarter is traditionally a weak period for IT companies due to the holiday season in the US and Europe, leading to furloughs and a reduced number of working days that impact performance. For Wipro, the decline in revenue was primarily attributed to the persistent weakness in the BFSI vertical and the company’s substantial exposure to consulting during a time of plummeting discretionary spending.

In the quarter ending December 2023, Wipro secured large deals worth $0.9 billion, which was lower than the $1.28 billion recorded in the last quarter. However, the total deal wins amounted to $3.8 billion, aligning with the figures reported in the September quarter.