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Wipro share price is down 44% from 52-week high, time to buy?

Wipro share price is down 44% from 52-week high, time to buy?

Wipro shares in focus: The stock of the IT firm hit its 52-week high on October 14, 2021 and fell to 52-week low on July 15, 2022. The IT sector stock closed at Rs 416.25 in the previous session, down 0.28 per cent on BSE.

Wipro stock has remained almost unchanged since Q1 earnings of the firm were announced on July 20. The stock closed at Rs 412.2 in the same session.  The earnings were announced after market hours. Wipro stock has remained almost unchanged since Q1 earnings of the firm were announced on July 20. The stock closed at Rs 412.2 in the same session. The earnings were announced after market hours.

Shares of Wipro have fallen 44 per cent from their 52-week high in 11 months. The stock of the IT firm hit its 52-week high on October 14, 2021 and fell to 52-week low on July 15, 2022. The IT sector stock closed at Rs 416.25 in the previous session, down 0.28 per cent against the previous close of Rs 416.25.  Wipro shares have lost 43.89 per cent from its 52-week high in comparison to the previous closing level.

Market cap of Wipro fell to Rs 2.27 lakh crore. Stock of Wipro stands lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. A total of 1.82 lakh shares of the firm changed hands, amounting to a turnover of Rs 7.57 crore on BSE. The stock has declined 38.42 per cent in a year and lost 41.96 per cent in 2022.

Q1 Earnings

The stock has remained almost unchanged since Q1 earnings of the firm were announced on July 20. The stock closed at Rs 412.2 in the same session.  The earnings were announced after market hours.

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The IT services company reported a 20.6 per cent year-on-year decline in consolidated net profit at Rs 2,563.6 crore for the quarter ended 30 June, 2022 as higher employee-related costs raised firm's overall expenses. The company had reported a net profit of Rs 3,232 crore in the year-ago period.  

Sequentially, net profit declined 16.9 per cent from Rs 3,087 crore. Wipro's revenues rose 19 per cent to Rs 21,529 crore in Q1 as compared to Rs 18,252.4 crore in the corresponding quarter of the last fiscal.  IT services segment revenue came in at $1.9 billion, an increase of 13.3 per cent YoY.

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Shareholding Pattern

In Q1 of the current fiscal, 24,01,883 public shareholders held a 26.75 per cent stake or 146.64 crore shares in the firm. 10 promoters held 73 per cent stake or 400 crore shares in the last quarter. 23.75 lakh public shareholders held 24.27 crore shares of the firm, amounting to a stake of 4.43 per cent with an individual share capital of up to Rs 2 lakh.

236 public shareholders held 16.89 crore shares of the firm, amounting to a stake of 3.08 per cent with an individual share capital of over Rs 2 lakh. 33 mutual funds owned 18.07 crore shares or 3.30 per cent stake in the firm at the end of June quarter. 705 FPIs owned 6.95 per cent stake or 38.07 crore shares in the IT major at the end of the last quarter.

Experts' Take

Here's a look at what analysts said on the outlook of Wipro stock.

Ravi Singhal, CEO, GCL

"As we can see, all IT stocks are trading at a significant discount. Wipro is another example. There is pressure on the US economy, which may enter a recession, and Europe's energy crisis is dragging it down. However, most factors have been priced in. So from our perspective, this is a good time to accumulate. Buy on dips near Rs 410 and stop loss of Rs 375. Target for the stock is Rs 470 to Rs 540 in this fiscal year."

Pranit Arora, CEO & CO Founder of Univest

"Wipro is among the leading IT companies in India. The IT sector as a whole has been underperforming since the beginning of the year. Wipro too has seen a drop of 40% in its share price from Jan 2022 and is currently trading close to its 52-week low.  Wipro has been losing its margins since last four quarters and its net profit dropped by 21% YoY in Q1FY23.  This is among the weaker of the IT stocks and one can consider some other stocks in this sector.
If there is an improvement in the fundamentals next quarter and if the stock trades above resistance level of Rs 450, it would come on the buying radar."

Vishal Wagh, Research Head, Bonanza Portfolio

"As far as the technical set up is concerned, Wipro is clearly in downtrend. It is also underperfoming broader indices. In the second week of July, there was diversion weekly chart of Wipro which led the bounce back till  Rs 444.90 levels but was not able to sustain above it. Even Nifty IT is underperfoming the Nifty. It shows that, not only Wipro but whole IT sector is underperforming currently. For Wipro, Rs 444 is resistance zone and support will be found at Rs 390. The stock is likely in the consolidation zone right know. "

Manoj Dalmia, founder and director, Proficient Equities

"Wipro stock looks weak and is in a sideways range. We can expect the stock to fall to a range of Rs 397. Investors can avoid heavy buying if having a short-term view and can accumulate with a long term view as it is available at a bargain."

Ravi Singh, vice President and head of research, Share India

"Wipro may trade in a range bound zone of Rs 390 - Rs 420 levels in the near term. Long-term investors may hold their positions and an immediate target of Rs 450 level is probable. Wipro is holding attractive valuations, however, weak EPS needs to be priced in into the current valuations."

About Wipro

Wipro is an India-based enterprise digital transformation specialist. The company is a provider of vertically focused enterprise technology solutions. Its segments include UK & Europe operations, North America operations, Middle East and Others. The portfolio of its offerings includes business and technology services, which consist of application development, application maintenance, business intelligence and data warehousing, testing and assurance and legacy modernisation.