Wipro Stocks Slip after fall in Q2 Results
Information Technology giant Wipro had a less than ideal start to the new Samvat as the company’s stocks declined for the second straight session yesterday. Wipro reported a consolidated net profit of Rs 2,085 crore during the July-September quarter which was down 0.9 % compared to the Rs 2,103.2 crore registered by the company in previous quarter. The company’s shares slipped over 2 per cent in early trade on the first day after the Diwali break which came after a disappointing 4 per cent slide on muhurat trading session.
Financial experts and the core management of Wipro are however optimistic of attaining an improving growth momentum in H2FY15 on the back of large deal wins. The optimism dwells from the fact that even though the consolidated net profit was down from the previous quarter, sale figures during the quarter increased to Rs 11,816 crore, up 12.4 per cent, from Rs 10,508.3 crore, quarter to quarter.
The disappointing quarter results from Wipro has meant that most financial analysts have downgraded the stock to neutral as strong deals inked by the company failed to translate into revenue growth figures. While Wipro’s second quarter net profit declined nearly 1 %, analysts believe that the company has strong fundamentals and can bounce back especially with the likelihood of H2FY15 (October-March) results to be far better than H1FY15. The company sees Q3 IT services revenues at $1,808-1,842 million. Q2 EBIT margins stood at 22 per cent vs 22.8 per cent, QoQ. India Infoline also echoed similar sentiments for Wipro calling the stock a relative under performer as uncertainty around growth trajectory precluded company’s valuation dismissing any hopes of a positive rating.
Wipro, the leading Information Technology, consulting and business process services company is expecting revenue from its IT services business to be in the range of $1808 million to $1842 million in Q3 December 2014 putting behind the negative market sentiment surrounding the company after its Q2 earnings.
