Shares of Wipro Ltd. hit a record high as analysts cheered its second-quarter guidance, healthy revenue, growth focus of the new chief executive, and deal wins, among others. The stock, however, soon came off its peak.
The software services exporter reported a 12.4% sequential growth in revenue at Rs 18,252.4 crore in the quarter ended June. That’s the fastest pace in 38 quarters. Its net profit and earnings before interest and taxes, too, rose.
Wipro now expects revenue from its IT services business to be at $2,535-2,583 million in the quarter ending September, a 5-7% growth over the preceding three months.
Thierry Delaporte, managing director and chief executive officer at Wipro, said the company would deliver a double-digit revenue growth for the full fiscal, even excluding the contribution from its recent Capco acquisition.
Wipro’s operating margin, however, contracted on account of wage hikes.
Analysts, too, highlighted a spike in attrition, wage hikes, rupee appreciation and the U.S.’ plan to raise corporate taxes as some risks for the company.
Shares of Wipro rose to a record high of Rs 589.24 apiece, but soon erased gains.
Of the 50 analysts tracking the company, 17 recommend a ‘buy’, 18 suggest a ‘hold’ and 15 have a ‘sell’ rating, according to Bloomberg data. The consensus 12-month target price of analysts tracked by Bloomberg implies a downside of 8% from the current levels.
Wipro stock has gained nearly 5% over the past month, and close to 50% in 2021 so far.