Wipro shares gain, analysts positive on Q2

Shares in Wipro, India's third largest software services provider, pared gains after a strong start. Some profit booking was witnessed in the counter after four straight days of gains. Wipro shares closed 1 per cent higher at Rs 364.95 on the BSE, marginally underperforming the broader BSE IT index, which gained 1.15 per cent.

Wipro shares have run up sharply this week on the back of brokerage upgrades ahead of earnings and the demerger of non IT business announced on Thursday. Shares have gained over 7 per cent in the last four sessions.

In early trade, Wipro shares had jumped nearly 3 per cent on the back of second quarter earnings. Wipro's net profit for the September quarter beat estimates and the fall in core margins was lower than expected. Wipro's sales outlook for the October to December quarter was mostly in line with estimates.

Net profit for the September quarter jumped 24 per cent year-on-year and 1.9 per cent on a sequential basis at Rs 1,610 crore.

Here's what leading analysts told NDTV Profit about Wipro Q2 earnings.

Bhavin Shah, chief executive of Equirus Capital

Results are in line with expectations, both in terms of dollar revenue and net income. The guidance is 1 per cent better in dollar terms. Margins have not changed much at the operating level because of higher expenses. Valuations are rich so we have a target of Rs 300. Investors can book some profits.

Sarvendra Srivastava, independent analyst

Buy with a target of Rs 370. The stock has medium term resistance at 380 mark.

Ambareesh Baliga

Q2 earnings were better than estimates even though expectations were muted. The stock can hold on to these levels for a while especially after the demerger announcement yesterday.

Prakash Diwan

Wipro continues to struggle in its core business. Shares can lose Rs 10-15 today. The demerger was announced yesterday as a sweetener before the disappointing results.

Aniruddha Mehta, IIFL

The IT services margins have fallen 20-30 basis point, which is a positive. The pricing has moved up. The number of more than $100 million clients has gone up to nine. The  
BFSI vertical, a pain point for most IT companies, has shown good growth. However, dollar revenue growth was a bit tepid than expected. The top line was a disappointment. The guidance also disappointed. We were expecting 2-4 per cent revenue growth for the next quarter but the guidance came at 1-3 per cent.