Mumbai: Wipro led the losers on the Nifty on Friday, coming under selling pressure after its March-quarter earnings missed expectations, with even a ₹15,000 crore buyback failing to lift sentiment. Brokerages said that the effective benefit of the share buyback to shareholders could be limited, with the premium translating into less meaningful upsides.
India’s fourth-largest IT services company posted a 2% decline in consolidated net profit at ₹3,502 crore for the March quarter from the same period a year ago. Most brokerages struck a cautious note. Goldman Sachs flagged a weaker-than-expected performance and said guidance indicates continued revenue contraction in the near term.
“While Wipro’s margin delivery has been strong, we expect revenue headwinds to translate into a near-term subdued EBIT margin profile,” said the brokerage in a client note. “We see limited signs of Wipro’s revenue underperformance gap closing with peers in the near term, particularly in a subdued macro environment.”
Kotak Institutional Equities said the company continues to lose ground to peers, with deal wins yet to translate into meaningful growth and the gap with competitors remaining wide. “We retain a cautious stance despite cheap valuations, given continued underperformance,” it said.
