Since reaching a 52-week high of Rs 443.60 on September 15 of this year, Wipro shares have decreased 11%. On January 3, 2022, the IT stock reached an all-time high of Rs 726.70.
After a 40% decline in the IT stock, Wipro Ltd. shares have left long-term investors unsure of whether to hold or sell their holdings. In terms of returns, it has not changed over the last year (-1.49%) or year-to-date (-0.46%). Since reaching a 52-week high of Rs 443.60 on September 15 of this year, Wipro shares have decreased 11%. On January 3, 2022, the IT stock reached its highest point ever, Rs 726.70. Wednesday’s closing price of Rs 391.40 for Wipro stock was 2.54% higher than the previous closing price of Rs 381.70 on the BSE. For a year, its beta was 0.3, which indicates very little volatility.
With its relative strength index (RSI) at 35.7, the stock appears to be neither overbought nor oversold on technical charts. The fact that Wipro’s shares are trading above the 5-day, 10-day, and 20-day moving averages but below the 30-day, 50-day, 100-day, 150-day, and 200-day moving averages indicates that the stock is currently in a bearish zone.
Wipro’s stock reached a high of Rs 392.20 during the day. Wipro’s market value increased to Rs. 2.04 lakh crore on the BSE. 5.67 lakh shares of the company were traded overall on the BSE, translating into a turnover of Rs 22.05 crore.
The brokerage firm KR Choksey reduced its target price to Rs 391 from Rs 486 in its report dated November 3.
At the moment, Wipro’s valuation has a P/E multiple of 16.4x/14.7x based on FY24E/FY25E earnings. Wipro is growing its clientele, gaining traction in a market that is consolidating, and landing big transformation deals. Therefore, to arrive at a revised target price of Rs 391 (previous target price of Rs 486) per share, an increase of 1.82% over the CMP, we are assigning a P/E multiple of 16x to the FY25 estimated EPS of Rs 24.46. As a result, we updated our assessment and gave the stock a “HOLD” rating, the brokerage said.
Following Q2 earnings, Nuvama Institutional Equities lowered its target price from Rs 400 to Rs 390. Wipro’s lackluster Q2 results and depressing Q3 outlook highlight the company’s difficulties in turning deal wins into expansion.
Due to the reduction in H1 (and Q3) guidance, Wipro will report a YoY decline for FY24 that is much lower than that of its competitors. We still anticipate Wipro to perform below its peers, mainly because of its strikingly low top-line growth correlation with deal wins. In the medium run, downside potential should be constrained by the stock’s cheap valuation and high dividend yield, the statement stated.
Nomura India reduced its target price for Wipro by 5% to Rs 400 in line with a 3-6% reduction in Wipro’s expected earnings per share. The FY24–26 EPS estimates from Nomura India are 8–12% less than the Street projections.
Nirmal Bang Institutional Equities lowered its target price of Rs 358 for the Wipro stock to Rs 353.
According to the brokerage, Wipro’s increased exposure to consulting (through Capco and Rizing) may have played a role.
In the second quarter of this fiscal year, Wipro reported earnings that fell short of forecasts. Its second-quarter profit for the fiscal year 2023–2024 showed a slight decline. The IT company reported a Q2 FY24 profit of Rs 2,646.3 crore (year-over-year) compared to Rs 2,659 crore during the same period last year, a decrease of 0.48 percent. Consolidated revenue from operations for the IT company decreased by 0.1% to Rs 22,516 crore for the three months ended September 30 from Rs 22,540 crore during the same period the previous year.
