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Wipro share price hits 52-week high on revised Q1 FY22 growth guidance

Wipro has raised its IT services revenue growth guidance for the June quarter to 8-10 percent sequentially in the range of $2.32-$2.36 million.

April 30, 2021 / 10:19 AM IST
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The shares price of Wipro rose over 3 percent to hit a new 52-week high in early trade on April 30 after the IT major revised its first-quarter growth guidance for fiscal 2022 following the acquisition of London-headquartered management consulting company Capco.

According to CNBC-TV18, Wipro raised its flagship IT services revenue growth guidance for the June quarter to 8-10 percent sequentially in the range of $2.32-$2.36 million. Earlier, it had expected its IT services business for the quarter to grow 2-4 percent in the range of $2.19 million to $2.23 million.

In March, Wipro signed an agreement to acquire Capco for $1.45 billion to strengthen its position in the banking, financial services, and insurance (BFSI) sector, which contributes about 30 percent to the company’s revenues. Wipro plans to operate Capco as a separate entity.

"The earlier guidance of Q1FY22 does not include revenue from recently announced acquisitions of Capco and Ampion. Capco generated nearly $720 million in revenue in 2020 and almost half of its revenues were from consulting banks and financial institutions. This acquisition will strengthen Wipro’s position in the BFSI sector," said Mohit Nigam, Head,  PMS, Hem Securities.

"We expect the Capco acquisition is likely to embolden Wipro's BFSI vertical capabilities, which will aid in large transformational deal wins. We expect recent restructurings efforts, which include simplified operating structure, step-up in capability upgrade and talent management under new leadership, bode well for Wipro in the medium term," said Suyog Kulkarni, Senior Research Analyst at Reliance Securities.

"We have buy recommendations on the stock with a two-year target price of Rs 565," he added.

The software company on April 15 reported a 0.1 percent sequential growth in consolidated profit at Rs 2,972.3 crore for the quarter ended March 2020. IT services business, which is widely tracked by analysts, clocked revenue at Rs 16,334 crore for the quarter, growing 3.9 percent quarter-on-quarter (QoQ) and beating CNBC-TV18 poll estimates of Rs 15,768 crore.

Wipro said the fourth quarter was its best in the last 10 years, CNBC-TV18 reported.

Also Read: What should investors do with Wipro after Q4 results: buy, sell or hold?

At 0920 hours, Wipro was quoting at Rs 503.85, up Rs 14, or 2.86 percent, on NSE. It touched an intraday high of Rs 511.8 and an intraday low of Rs 491.5.

Moneycontrol News
first published: Apr 30, 2021 09:55 am