Shares of Wipro surged 13 percent in intra-day deals today to hit a fresh 52-week high of ₹526.45 as the company’s December quarter earnings beat estimates even though it reported a decline in its net profit for the December quarter (Q3FY24).
This also comes after the company’s American Depository Receipts (ADRs) surged almost 18 percent to hit a near-20-month high of $6.35 after the company reported its results on January 12.
Wipro’s net profit fell 12 percent year-on-year (YoY) and 1.2 percent sequentially to ₹2,694 crore. The company’s profit in Q2FY24 was ₹2,667.3 crore and in Q3FY23 was at ₹3,065 crore.
This is the fourth consecutive quarter where Wipro has reported a decline in profits on a YoY basis and market experts expect this underperformance to continue.
Its consolidated revenue from operations declined 4.4 percent YoY and 1.4 percent QoQ to ₹22,205.1 crore. In the same quarter last year, Wipro’s revenue was ₹23,229 crore while in Q2FY24, the IT firm’s revenue was ₹22,515.9 crore. In constant currency, revenue dropped by 1.7 percent QoQ and 6.9 percent YoY.
Meanwhile, it reported a 1.8 percent quarter-on-quarter (QoQ) increase in its net income to ₹2,690 crore ($323.9 million) for the third quarter of the current financial year (Q3FY24).
Wipro expects revenue from its IT services business segment to be in the range of $2,615 million to $2,669 million for Q4FY24. This translates to sequential guidance of -1.5 percent to +0.5 percent in constant currency terms.
In Q3 FY24, Wipro’s total bookings came in at $3.8 billion in constant currency, marking a slight 0.2 percent QoQ increase but reflecting a notable 13.5 percent YoY decline. Large deal bookings stood at $0.9 billion in Q3 FY24, showing an 8.3 percent YoY decrease.
“In a seasonally soft quarter, deal booking momentum remained strong. Our large deals recorded a 20 percent year-to-date growth. Further, we are starting to see early signs of a return to growth in consulting, as demonstrated by the double-digit growth in order bookings in our Capco business," said Thierry Delaporte, CEO and Managing Director of Wipro.
Following the 13 percent surge in Wipro as well as the better-than-expected results of other IT peers including Infosys, TCS and HCL Tech, the entire Nifty IT index jumped over 2.5 percent in intraday deals on Monday. Wipro was the top performer followed by Tech Mahindra, which advanced over 7 percent to its 52-week high of ₹1,401.50. Meanwhile, HCL Tech also rose 5 percent to its record high of ₹1,617.65.
TCS and Infosys also hit their respective 52-week highs on Monday, up 2 percent and 3.2 percent, respectively.