The IT giant Wipro announced a bonus share issue and posted respectable profitability for the second quarter of FY25, which caused the share price to soar by more than 5% in early trading on Friday. On the BSE, Wipro shares increased by 5.34% to a peak of ₹557.05 per.
In the quarter that concluded in September, Wipro, the fourth-largest software services exporter in India, posted IT services revenue of ₹22,196 crore, up 1.4% from ₹21,896.3 crore in the previous quarter. From $2,625.9 million to $2,660 million in Q2FY25, USD revenue increased 1.3% sequentially. The $1.5 billion in large deal bookings saw a QoQ increase of 28.8%.
The IT services offered by Wipro’s EBIT margin rose by 30 basis points to 16.8% from 16.5%, QoQ, while EBIT increased 3.5% to ₹3,732 crore from ₹3,605.7 crore.
For the third quarter of FY25, the firm projects revenue from IT services to be between $2,607 million and $2,660 million, which translates to sequential guidance of -2.0% to 0.0% in constant currency terms.
Additionally, the Wipro board of directors announced the issuance of bonus shares at a 1:1 ratio.
What do analysts say?
Broking company Nomura claims that Wipro’s Q2 performance exceeded all expectations. Despite a solid momentum for significant contract wins in the second quarter, the guidance for the December quarter indicates weak seasonality.
Wipro rates it as a “Buy,” with a target price of ₹680 per share.
Wipro is projected to report dismal Q3 revenue, but Antique Stock Broking pointed out that the business is still confident in its ability to maintain stable margins despite two months of salary hikes.
“Wipro’s revenue growth over the past 5-6 quarters has underperformed its large peers due to a higher than expected decline in consulting and discretionary. The company did suggest that its overall business looks to be improving gradually, however, the guidance suggests muted growth in the next quarter as well. We continue to value Wipro at 22x FY27 EPS, which is at a 15% discount compared to its peers-Infosys and HCL Technologies,” Antique Stock Broking said.
The broking firm lowered its revenue projection by 1%–2% for FY26 and FY27 and its EPS estimates by 2%–3% in response to the dismal Q3 guidance. It kept the target price of ₹575 per share constant and maintained a “Hold” recommendation on Wipro shares.
Wipro shares were up 4.39% at ₹552.00 a share on the BSE at 9:45 a.m.
