Wipro stock slips 2% ahead of Q3 results; can it retest Rs 420 level in near term?

Shares of Wipro fell in Friday's trade, halting their four-day rising trend ahead of the December quarter (Q3 FY23) results, due later in the day. The stock slipped 1.98 per cent to hit a day low of Rs 386.65 over its previous close of Rs 394.45.

The company board would also consider declaration of an interim dividend. The IT company is expected to report a muted 2-3 per cent (YoY) growth in profit. Wipro is likely to register 15-16 per cent growth in terms of revenues.

Emkay Global expects Wipro to log a 2.3 per cent YoY rise in net profit at Rs 3,037.80 crore compared with Rs 2,969 crore in the same quarter last year.

Nuvama expects Wipro to report EBIT margin at 15.3 per cent, the lowest in the Tier-I IT pack. Motilal Oswal expects EBIT margin to come in at 14.6 per cent compared with 14.4 per cent in the September quarter and 17.5 per cent in the year-ago quarter.

On the technical front, support on the counter could be seen at Rs 385.

Kotak Institutional Equities has assigned a 'reduce' rating on the counter with a target price of Rs 415.

Technical analysts also suggested that the counter may retest the Rs 420 level in the near term.

Mehul Kothari, AVP - Technical Research, Anand Rathi Shares and Stock Brokers, said, "The scrip is oscillating within the range of Rs 380-400 and a breakout or a breakdown from this range might dictate the further direction for Wipro. There is a possibility of a bullish breakout above Rs 400 in the coming sessions. In this scenario, it might retest Rs 420 level which is the placement of its 200-day moving average.

Ravi Singh, Vice-President and Head of Research at Share India also echoed similar views. "It could rise in the near term and may touch Rs 420 level," he said.

AR Ramachandran from Tips2trades said, "Wipro has massive resistance at Rs 398 on the daily charts. A close above this level could trigger a strong buy for targets of Rs 415-428 in the near term. Support will be at Rs 385."

Sneha Seth, Derivatives Research Analyst at Angel One, said, "Those traders who have been stuck in this counter are advised to hold with a strict stop loss of Rs 370. On the upside, any move beyond Rs 420-425 will bring back momentum, which may pull towards Rs 440-445-odd zone."

Around of 1.17 lakh shares changed hands today on BSE, which was lower than Wipro's two-week average volume of 4.11 lakh. Turnover on the counter stood at Rs 4.56 crore, commanding a market capitalisation (m-cap) of Rs 2,14,891.21 crore.

There were 2,23,350 buy orders on BSE, against sell orders of 1,95,905 shares.

The counter's 14-day relative strength index (RSI) came at 49.35. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 17.39.

The counter was last seen trading higher than 5-day, 20-, 50-, 100- and 200-day moving averages. National Standard has a one-year beta of 0.44 per cent, suggesting low volatility on the stock.

The scrip was last seen trading higher than 5-day and 20-day moving averages but lower than 50-day, 100- and 200-day moving averages. L&T Tech has an average target price of Rs 495.15, Trendlyne data showed, suggesting an upside potential of 17.23 per cent. The stock has a one-year beta of 1.11 per cent, indicating high volatility.

In a separate development, Wipro said it "has granted 1,27,616 restricted stock units under its 'Restricted Stock Unit Plan 2007' and 84,389 restricted stock units under 'ADS Restricted Stock Unit Plan 2004' to its identified employee(s)/identified employee(s) of its subsidiary company." This grant is effective from January 11, 2023, it added.

Meanwhile, Indian equity benchmarks rebounded in afternoon deals today, led by gains in technology, banks and financials.

Also Read: Wipro Q3 results, dividend announcement today: 5 things you should know