Wipro shares surged nearly 5 percent on October 18 after the IT giant delivered earnings that exceeded street expectations on all major fronts, marking its first sequential revenue growth in six quarters of decline.
By 10:40 AM, Wipro's shares were trading 3.6 percent higher at Rs 547.80, with the stock gaining 14 percent year-to-date, keeping pace with the Nifty 50's performance.
Wipro's consolidated net profit for Q2 FY25 rose by nearly 7 percent quarter-on-quarter to Rs 3,209 crore, surpassing Moneycontrol's estimate of Rs 3,011 crore. Revenue from operations increased by 1.5 percent QoQ to Rs 22,302 crore, beating Moneycontrol's forecast of Rs 22,219 crore.
Operating margins for the quarter improved by 30 basis points to 16.8 percent, exceeding the anticipated 16.4 percent.
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Total bookings for Wipro rose to $3.56 billion in the September quarter, up from $3.23 billion in the prior quarter. Large deal bookings also saw a notable rise to $1.49 billion from $1.15 billion.
"Wipro's deal pipeline is also strong, particularly in the BFSI sector, which is witnessing a pickup in discretionary
spending," said Motilal Oswal Financial Services.
Three out of four markets, and three of six verticals, posted growth during the September quarter. However, the energy and utilities sectors, which have struggled for 4-5 quarters, still offer opportunities through cost reductions and vendor consolidation.
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JM Financial has increased its FY24-27E EPS forecasts by 1-4 percent, primarily due to stronger margin expectations.
Wipro announced a 1:1 bonus share issue alongside the earnings release.
However, the challenge of consistent growth across all verticals remains, with continued weakness in manufacturing and energy & utilities, along with client-specific issues in Europe.
Wipro's guidance underwhelmed with a (-) 2 percent to 0 percent QoQ constant currency growth for Q3 FY25. This marks a downward revision from the September quarter's forecast, which allowed for a revenue change of up to 1 percent in either direction. The company attributed the muted outlook for the December quarter to furloughs, fewer working days, and client-specific ramp-downs.
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