Wipro shares slipped over 4 per cent in early trade on Monday after the company said it expects revenues in the ongoing quarter to be impacted by a “mixed demand environment”. The company on Friday after market hours reported 0.90 per cent rise in its consolidated net profit for the quarter ended September 2016 against Rs 2041.90 crore in the sequential quarter ended June 30, 2016. Gross sales of the company increased by 1.22 per cent on quarter-on-quarter basis to Rs 13,765.70 crore.
Triggered by the impact of Brexit and global economic slowdown, the country’s third largest software services firm said it expects its IT service revenue for the October-December quarter of 2016-17 to be in the range of $1,916 million to $1,955 million. With IT services revenue at $1,916 million in the September quarter, this would translate into a 0-2 per cent sequential growth. Wipro also missed its own guidance of $1,931 million to $1,950 million for the July-September period, given at the beginning of the quarter.
At 9.40 am, shares of Wipro were trading 3.51 per cent down at Rs 481.70. The scrip opened at Rs 491 and had touched a high and low of Rs 494.80 and Rs 478.10, respectively, in trade so far. Benchmark BSE IT index was down 0.71 per cent at 10278.99 at the same time.
On a standalone basis, the company reported 3.77 per cent fall in net profit at Rs 1932.10 crore for the quarter under review against Rs 2007.70 crore in the sequential quarter ended June 30, 2016.
Nirmal Bang Institutional Research retained ‘Sell’ rating on Wipro shares post Q2 numbers with a target price of Rs 436.
Sharekhan in a research note said, “Wipro’s performance continues to lag its peers, with lower-than-anticipated growth trajectory in FY2017/FY2018E, despite recent big acquisitions and low base of FY2016. We have tweaked our estimates for FY2017/FY2018E to incorporate Appirio acquisition and lower-than-expected organic growth. We continue to remain cautious on Wipro’s growth prospects and maintain our ‘Hold’ rating with a revised price target (PT) of Rs 550.”