Wipro hits 52-week high as firm revises Q1FY22 revenue guidance

Shares of information technology (IT) services major Wipro jumped 4.5 per cent to hit a 52-week high of Rs 511.95 on the BSE in intra-day trade on Friday after the company revised its IT services revenue guidance for the quarter ended June 2021.

Wipro in an exchange filing earlier today said it expects revenue from its IT services business to be in the range of $2,324-$2,367 million during the first quarter of FY22. This translates to a sequential growth of 8-10 per cent.

During its earnings announcement for the March quarter of FY21 on April 15, the IT bellwether had guided for a 2-4 per cent QoQ growth in IT services revenue to $2,195-$2,238 million.  

The company revised the guidance on the completion of the acquisition of Capco although it clarified that the new guidance does not include revenue from its recently announced acquisition of Ampion.

Wipro on March 4, 2021, had informed that it has signed an agreement to acquire Capco, a global management and technology consultancy company providing digital, consulting and technology services to financial institutions in the Americas, Europe and the Asia Pacific. The said acquisition was completed on April 29, 2021.

Wipro's consolidated net profit stood at Rs 2,972.3 crore during Q4FY21, up 27.78 per cent year-on-year (YoY), as against Rs 2,326.1 crore posted in the same period last year. On a quarter-on-quarter (QoQ) basis, the profit increased marginally by 0.14 per cent, compared to Rs 2,968 crore reported in the December quarter of FY21.

Its consolidated revenue from operations, meanwhile, climbed 3.4 per cent YoY to Rs 16,245.4 crore in the recently concluded quarter.

Following the presentation of results, most brokerages held bullish views on the counter.

"Wipro delivered an upbeat QoQ performance in Q4FY21 with 3 per cent CC revenue growth, ahead of our estimate of 2.6 per cent. Growth was driven by BFSI, ENU, hi-tech and retail. Operating margin at 21 per cent also came in above expectations. TCV was robust at $ 1.4bn and included 12 large deals. We increase FY22/FY23 EPS by 7.5 per cent/4.5 per cent factoring in the Q4 performance, management’s guidance and a strong deal pipeline," analysts at BoB Capital said.

The brokerage reiterated its ADD rating on the counter and raised the target price to Rs 470 based on an unchanged 18.8x P/E. The target price has now been met.

At 10.15 am, the scrip was trading 3.21 per cent higher at Rs 505.65 on the BSE as against a fall of 0.77 per cent in the S&P BSE Sensex.