Wipro shares: MFs cut exposure to stock ahead of Q1 results

Mutual funds trimmed exposure to shares of Wipro in the run-up to its quarterly results on July 13. The domestic fund managers owned 12.65 crore shares in Wipro as on June 30 against 13.90 crore shares as on May 30. In value terms, their holding value in Wipro dropped to Rs 4,922 crore at June-end from Rs 5,611 crore at May-end, ICICI Securities suggested.

To recall, Wipro shares were down 3.65 per cent in June after rising 4.84 per cent in May and 5.43 per cent in April. Analysts are keeping muted expectations from the June quarter earnings season. Dhruv Mudaraddi, Research Analyst at Stoxbox expects Wipro's constant currency (CC) revenue to fall 3-5 per cent sequentially for the quarter, majorly impacted by macro weakness and soft discretionary spending environment.

The revenue decline is likely to be led by broader weakness in financial services, hi-tech vertical, and softness in its consulting business, he said.

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"It would be interesting to see if the weakness has spread to other verticals as well. We expect a corresponding decline in margins and expect a deterioration of about 10-15 bps. Our focus would be on the management’s commentary with regards to its growth guidance, demand outlook, large deal wins pipeline, BFSI vertical outlook, and EBIT margin outlook," Mudaraddi said.

Emkay Global expects Wipro to guide flat (minus 1 per cent to 1 per cent) CC QoQ revenue growth for Q2FY24. The brokerage sees Wipro's Q1 profit at Rs 3,091 crore, up 20.6 per cent YoY or 0.5 per cent sequentially. It sees dollar revenues at $2,783 million, up 1 per cent YoY but down 2 per cent sequentially. Ebit margin is seen at 16.1 per cent, down 10 basis points QoQ but up 130 basis points YoY.

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