The stock price of Wipro fell by 3.09% on Monday and closed the session at Rs 483.75, after it posted a tepid revenue growth of 1.5% at Rs 13,897 crore for the three months to September, on Friday.
Monday’s fall was the biggest for Wipro’s stock in the last six months. Earlier, on April 16,2016 the stock had fallen over 7%.
Wipro reported an IT services revenue decline of 3.3% sequentially while its net profit stood at Rs 2,070 crore, a rise of
1% for the quarter ended September 2016 (Q2FY17). The company had a net profit of `3,436 crore in June 2016 quarter.
In a note to investors, Jefferies said this trend of tepid growth will continue in the next quarter, “Wipro has added no organic incremental revenue over the past three-quarters now, to continue in Dec-16 as well,” it said.
Barring TCS and HCL Technologies, share prices of other three major IT companies by revenue — Wipro, Infosys and Mindtree — fell in the range of 2% to 5% after announcement of their quarterly results. The second-largest IT firm by revenue — Infosys — slid 8.8% and 2.4%, respectively on the day of the results of the first two quarters of the 2016-17 financial year.
With net revenues of TCS and Mindtree falling quarter-on-quarter in the three months ended September 2016, the combined net sales of these five companies of five software firms decelerated to 1.18% — the lowest quarter on quarter growth in the last seven quarters.
While the EBIT margin for theses IT companies grew by 26.3% in Q2-FY17 from 25.8% in Q1FY17, the net profit rose by 2.9% sequentially.
The IT index has fallen by 7.3% since January, while the benchmark Sensex has risen 7.9% during the same period.