Shares of this large-cap IT company jumped around 6 percent in Friday’s trading session after receiving a USD 500-million deal by a leading US communication service provider over a period of five years.
With a market capitalization of Rs. 2,53,718 crores, the shares of Wipro Ltd started Friday’s trading session on a higher note at Rs. 470 compared to its previous close of 461. During the trading session, the shares hit a high of Rs. 486.40, gaining around 6 percent and are currently trading at Rs. 484 apiece.
Such a positive movement in the share price was observed after the company in an exchange filing announced that they had been awarded a USD 500 Mn deal by a leading US Communication Service Provider over a period of five years. For this, Wipro shall provide managed Services for some products and industry-specific solutions.
Coming onto the company’s financial statements, the revenue increased marginally by 0.01 percent from Rs. 22,205 crores during the December quarter to Rs. 22,208 crores in the March quarter. In addition, the net profits increased by around 6 percent from Rs. 2,701 crores to Rs. 2,858 crores during the same period.
In the fourth quarter, the IT company’s order bookings amounted to 3.6 billion US dollars, with significant deal bookings Total Contract Value (TCV) reaching 1.2 billion US dollars.
For the fiscal year 2024, total large deal bookings TCV stood at 4.6 billion US dollars, indicating a notable growth of 17.4 percent compared to the previous fiscal year.
The company’s strategic focus entails accelerating the momentum of large deals through proactive engagement with clients and partners and strengthening relationships with significant clients and partners is paramount to driving growth initiatives.
Additionally, the company is emphasizing industry-specific offerings and AI-infused business solutions to meet evolving market demands efficiently.
Moreover, the international brokerage firm Morgan Stanley said that the mega-deal in the US can be taken positively, especially when the discretionary spending environment remains tight.
Further, the brokerage firm added that although such large deals add to their visibility on revenue growth, Wipro’s near-term growth could still lag its peers and until that growth gap narrows, the price-to-earnings multiple gap between peers and Wipro will remain wide as well.
For the above reasons, Morgan Stanley gave a rating of “underweight” on Wipro with a price target of Rs. 421. The price target implies a potential downside of 13 percent from the current levels.
Headquartered in Bangalore, Wipro Ltd is a global Information technology, consulting and business process services (BPS) company. It is the 4th largest Indian player in the global IT services industry behind TCS, Infosys and HCL Technologies.
Written By Vaibhav Patil
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