Wipro share price: Stock touches new 52-week low, down nearly 8% since Q4 results announcement

Declining for the fifth straight session, IT major Wipro shares touched a new 52-week low of Rs 483.2 per share on the BSE intraday after slipping over 3.5 per cent during Friday’s session. The stock since the announcement of March quarter results has tumbled by almost 8 per cent on the BSE. 

The counter has declined below its earlier 52-week low of Rs 477.80, hit on May 4, 2021, and it has tumbled over 18 per cent in the last one month, as against a 7.7 per cent fall in the S&P BSE Sensex. 

The decline in the stock mainly came on the back of disappointing margins during the fourth quarter of the financial year 2021-22 (Q4FY22) and also tepid revenue guidance for the first quarter of FY23. 

Wipro gave revenue guidance growth between 1 and 3 per cent for the first quarter of FY23, while the management stated that based on this growth for FY23, the guidance will be 16-18 per cent. 

IDBI Capital in its note said, “Wipro sees headwinds in margins and hence expects margins to be below its guided range (17-17.5%) in next 2-3 quarters. This has led us to revise margin estimates downwards. Hence, we lower target price ar Rs 560 per share, while maintaining Hold rating.” 

On April 29, the IT major reported its March quarter results, wherein its net profit swelled by almost 4 per cent year-on-year (YoY), and 4 per cent sequentially to Rs 3,087 crore, while its revenue grew by 28 per cent YoY at Rs 20,860 crore in Q4FY22.  

The company’s focus on growth, acquisition to bridge capabilities, and supply-side pressure will dent margins in the near term. Hence, we expect 46 bps dip in FY23E margins to 16.4 per cent, the IDBI Capital also said in a note. 

The company also mentioned that there has been a structural change in deals in the market where clients are breaking large deals into medium deals, which is baked in this guidance.