Wipro's stock slips ahead of Q1FY25 earnings; check what analysts expect

Wipro is expected to see a tepid June quarter with revenues estimated to slide on a year on year basis and net profits seeing a marginal rise

Wipro's share price falls: Wipro’s stock price shedded up to 2.51 per cent at Rs 558.80 a piece on BSE Sensex in Friday’s intraday trade. The stock price slipped in anticipation of a flattish quarterly earning for the quarter ended June 30, 2024 (Q1FY25). 

The IT major is expected to see a tepid June quarter with revenues estimated to slide on a year on year basis and net profits seeing a marginal rise. That apart, analysts say that there are some positives, too, for Wipro who is seeing continued cost controls and a strong deal pipeline.

According to brokerage estimates compiled by Business Standard, Wipro may see revenues in the range of Rs 22,195 crore to Rs 22,409 crore for Q1, a fall 1-3 per cent year-on-year (Y-o-Y). 

Sequentially revenues are estimated to be flat, with a marginal increase of up to 1 per cent. The company registered revenues of Rs 22,195 crore in Q4FY24 and Rs 22,824 in the first quarter of FY24. 

Moreover, the IT major may report a net profit in the range of Rs 2,879 crore to Rs 3,024 crore for the June quarter, against Rs 5,945 crore in Q1FY24. This translates to an increase of 0-5 per cent Y-o-Y for Q1FY25. 

Though on a quarterly basis, profits could improve by 1-7 per cent. The company reported profit after tax of Rs 2,834 crore in the March quarter of FY24. 

Analysts at Kotak  forecasted a 30 basis points (bps) increase in earnings before interest and tax (Ebit) margin Q-o-Q due to cost containment and efficiency measures. 

Further strong deal signings after multiple quarters of disappointment with its first mega-deal since 2021 in the communications vertical will play out strongly for the company going forward.

“We expect revenue growth guidance of -1 to 1 per cent. We expect growth in the Americas to be offset by weak Europe and APMEA,” analysts at Kotak wrote in a report.

The brokerage has a ‘Sell’ call for the company with a target price of Rs 440. 

From the management, the street will look out for answers on questions such as continued senior leadership attrition, efficacy of measures taken by the new CEO to turn around the business, sustenance of greenshoots in the consulting business, and margin levers to meet aspirational margin level of over 17 per cent. 

At 12:20 PM, the shares of Wipro were trading 1.86 per cent lower at Rs 562.55 per share on the BSE Sensex. By comparison, the benchmark index Sensex was down 0.39 per cent at 81,023 levels. 

The company’s share price is currently trading at a price to earnings multiple of 32.88 times with an earning per share of Rs 17.43.