What are Market Expectations from Wipro As Indian IT Sector Turns Cautious?

Wipro is going to report its earnings for the first time under the new CEO, Srinivas Pallia after the resignation of Theirry Deaporte, The company is expected to report muted earnings for this quarter according to analysts.

What is the Market Expecting?

According to the latest poll of CNBC-TV18, Wipro Ltd. is likely to give a guidance between 0%-2% revenue growth in the first quarter of the financial year 2025. It also states that US dollar revenue for the IT firm will see a marginal decline. Constant currency growth is also guided between -1.5% to 0..5% and is expected to be seen lower by 0.3% compared to the previous Q3 December quarter. 

According to brokerage estimates, Wipro is likely to report a net profit in the range of Rs 2,778 crore to Rs.2,829 crore for the fourth quarter, down 8-10% year on year (YoY) against Q4FY23 where it reported Rs 3,076 crore. 

On to the Top end prospects, the company’s revenue is expected to decline by 4-5% YoY to be registered between Rs.22,126 crore and Rs.22,346 crore, according to brokerage estimates. 

IT Sector Turned Cautious

After Disappointing results from IT heavyweight Infosys yesterday, The Indian IT sector has turned cautious now and specifically the Large Cap IT stocks, Heavyweights like TCS, INFOSYS, HCL TECH, WIPRO have all fallen around  1% in the morning trade.

Important Things To Check out for in the Management Commentary

The Street will await commentary on the reasons for which Thierry Delaporte stepped down before the completion of his term. Commentary would also be awaited on the company’s strategy under its incoming CEO and Wipro veteran Srinivas Pallia. Wipro’s Capco acquisition had seen double-digit sequential growth in overall order intake. Commentary will also be awaited on whether the recovery in the Capco vertical has continued or was just a flash in the pan and most importantly commentary would also be awaited for upcoming earnings guidance.

Conclusion: The IT veteran is expected to report a decline in earnings on a YoY basis due to weak demand, Management commentary for upcoming growth guidance and organisational structural changes is what needs to watch out. The stock is down by 10% in the last month and up by 23% in the last 1 year and currently trades at Rs.442 a piece as of 19th April.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.