Wipro Reports Q2 Today, Guidance in Focus

Wipro shares closed near Rs 170.92 on Wednesday, up over 1%, as investors position for the IT major’s September quarter results today, with the December quarter guidance likely to matter more than the numbers themselves. Brokerages expect revenue to grow about 9% year on year and net profit about 2%, a muted picture. Sequentially, IT services revenue is seen slipping 0.5% to 1.4% in constant currency, near the low end of company guidance, with acquisitions like Mindsprint and AlphaNet adding only about 40 basis points each. The brighter spot is margin: Emkay and Motilal Oswal expect IT services EBIT margin to improve 40 to 50 basis points, with Motilal pegging it at 16.4%. For the December quarter, analysts expect guidance between a 2% decline and flat growth. Wipro has lagged larger peers this year, and the stock sits far below its yearly high, so the market is looking for evidence of stabilisation rather than a blockbuster. Sector peers HCLTech and TCS have already surprised on the upside this season, raising the bar slightly. Flat to negative guidance would reinforce the view that Wipro is still recovering, while any hint of positive growth, deal wins or large order bookings could trigger a sharp relief rally given depressed sentiment. The stock has ranged between Rs 156.79 and Rs 273.10 over the past 52 weeks, with a market cap of around Rs 1.67 lakh crore, trading closer to its low than its high. Today’s results, due after market hours, will test whether margin recovery can offset soft revenue. Disclosure: Palash Kag, Proprietor, Sarathi Research (SEBI Reg. No. INH000012740). No position held in Wipro. This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold any security. Please consult a registered advisor before making investment decisions.