Best Day In 16 Years For Wipro Shares After Better-Than-Expected Earnings: 10 Points

Wipro shares led sharp gains in the IT pack

The stock registered strong outperformance on a day the benchmark Sensex index gave up nearly all of its intraday gains to end marginally higher. Wipro remained the top percentage gainer in the Nifty basket of 50 shares throughout the day.
Wipro shares led sharp gains in the IT pack, pushing the Nifty IT index - comprising technology stocks of rivals Tata Consultancy Services and Infosys - 5.24 per cent higher. That marked the biggest single-day jump for the index since April 7, 2020.
In a regulatory filing after market hours on Tuesday, the company had reported a net profit of Rs 2,390.20 crore for the quarter ended June 30, beating analysts' expectations.
Wipro's revenue came in at Rs 14,913.10 crore in the first quarter of current financial year, marking a fall of 5.08 per cent compared to the previous quarter.
Wipro said the conditions caused by the coronavirus pandemic could adversely affect its future sales, operating results and overall financial performance. "Our operations may also be negatively affected by a range of external factors related to the COVID-19 pandemic that are not within our control," the company added.
In a separate statement, Wipro announced the acquisition of Brazil-based IVIA Servicos De Informatica for $22.4 million (Rs 168 crore at $1 = Rs 75.14).
The company said its IT services revenue stood at Rs 14,595.60 crore in the quarter ended June 30, down 4.58 per cent from the previous quarter.
In constant currency terms, Wipro said its IT services segment revenue declined 4.4 per cent on a year-on-year basis.
Operating margin - a key measure of profitability - in the IT services segment improved to 19.0 per cent in the June quarter, compared to 17.6 per cent in the January-March period.
"We expanded the margins during the quarter, despite lower revenues, on the back of solid execution of several operational improvements and rupee depreciation," chief financial officer Jatin Dalal said.