Tracking Wipro shares? Here’s how they might move post Q1 earnings

Shares of IT major Wipro Ltd have delivered flat returns to investors during the last one year.  Wipro shares, which closed at Rs 406.90 on July 13, 2022, were trading at Rs 397.40 in early deals today. On a year-to-date basis too, the IT stock has risen merely 1.18%. Wipro stock, which is the cheapest among the three IT behemoths in terms of market price, rose over 1.5% to Rs 398.65 ahead of the Q1 earnings set to be announced today.  

The IT stock closed at Rs 391.60 in the last session. Wipro stock touched an intraday low of Rs 391.60 on BSE today, signaling the stock is in an uptrend ahead of Q1 earnings. Market cap of Wipro rose to Rs 2.17 lakh crore on BSE today. Total 2.10 lakh shares of the firm changed hands amounting to a turnover of Rs 8.30 crore on BSE.  

In terms of technicals, the relative strength index (RSI) of the Wipro stock stands at 51.9 , signaling the stock is neither oversold nor overbought. Wipro has a one-year beta of 1, indicating average volatility during the period. Wipro shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages. 

In Q4 of the last fiscal, IT major Wipro reported a 0.4 per cent year-on-year (YoY) fall in consolidated net profit at Rs 3,074.50 crore compared with Rs 3,087.30 crore in the same quarter last year. Consolidated revenue for the quarter rose 11.17 per cent to Rs 23,190.30 crore compared with Rs 20,860 crore in the year-ago quarter.IT Services operating margin for the quarter came in at 16.3 per cent, flat sequentially. 

Dollar revenue for the quarter came in at $2,823 million. IT services reported a 0.6 per cent degrowth (up 6.5 per cent YoY) in revenues in constant currency terms. Margin stood at 17 per cent in the year-ago quarter. 

Here’s a look at what analysts said on the outlook of stock ahead of Q1 earnings of the firm.  

Abhijeet from Tips2trades said, "Wipro looks sideways to bearish with strong resistance at Rs 398 on the Daily charts. A daily close below the support of Rs 387 could lead to targets of  Rs 370-356 in the near term." 

Rohan Shah - Technical Analyst, Religare Broking said, "The primary trend of the stock remains bearish, as the stock is trading below its long-term average i.e. 200 Daily EMA. However, the stock has seen a gradual recovery with a positive bias, after finding support around the 375-380 zone, which coincides with 50% retracement level of its prior advance from 352 to 410 levels and previous swing low. In the near term, we anticipate the stock has the potential to scale higher towards the 410-415 zone, being the crucial supply zone. We believe the short to medium trend shall turn bullish, once stock sustains above the said resistance zone. This development in price would attract fresh upward momentum and will open the way till 445 levels."

Nirvi Ashar - Fundamental Analyst, Religare Broking said, "Wipro’s Q1FY24 results were largely in-line with management expectations on both revenue and margin front. For the near term, demand is expected to be soft and clients are still delaying their spending due to the challenging macro environment. However, from a long-term perspective, IT majors as well as Wipro are expecting clients to prioritize their spending towards cost optimization, vendor consolidation, and Automation deals. Further, demand is set to get back on track as well as investment in Automation and Gen AI-based products & solutions will aid strong growth. We would wait for 1 or 2 quarters for demand to stabilize and revenue as well as margins to steadily improve. Further, we believe other large caps are better placed than Wipro, so we maintain a Hold rating for Wipro with a target price of Rs 432."

Laxmikant Shukla, Technical Research Analyst, YES Securities said, “Wipro's stock remained sideways in the last few weeks as it failed to give any directional move. On the daily chart, prices are facing stiff resistance at Rs 405-410 zone. This is where the top of bearish candle pattern is seen that was formed on June 9. The Daily RSI also turned lower and failed to surpass its prior peak, suggesting ambiguity for the directional move. However, on the downside, the stock has formed base around the zone of Rs 375-370 levels.  Hence, a decisive move on either side is required for showing any unidirectional move.” 

Vaibhav Kaushik, Research Analyst, GCL Broking said , "Wipro can show in line profit. Our expectations are  Rs 2900 cr profit. All negatives are a factor in it. So it can go up to  Rs 440 in this quarter. Keep a stop loss of Rs 369."

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, “The stock has been gradually on the rise with series of higher bottom formation pattern visible on the daily chart and with a positive candle formation indicated it has improved the bias and sentiment to anticipate for further rise in the coming sessions. The initial target would be near Rs 410 levels with near-term support zone of Rs 488-490 levels. A decisive move past Rs 413-415 zone would overall strengthen the trend and can anticipate for further higher targets of Rs 445-460 levels.” 

 

Also read: Stocks that share market analysts recommended on July 13, 2023: Titan, Reliance Industries, Tata Motors, Bharat Electronics, others

Also read: Stocks to watch on July 13, 2023: Wipro, TCS, Patanjali Foods, HCL Tech, Titan, others