Wipro Sinks 8% as Q1 Growth Lags Infosys, TCS

Wipro shares fell over 8 per cent in early trade on Friday despite the IT major posting a 1.2 per cent sequential dollar revenue growth in the June quarter, which met Street estimates.. Traders, however, pointed that Wipro's revenues growth paled in comparison to Infosys' 2 per cent sequential dollar revenue growth and TCS' stupendous 5.5 per cent sequential growth. The June quarter is traditionally considered to be a strong one for outsourcers.. Wipro's Q2 sales outlook of 1.7-4 per cent also disappointed analysts for being too wide. Nomura added that Wipro's sequential dollar revenue growth guidance for Q2 is the same as that given in Q1 and excluding the ATCO deal, guidance implies only a 1.2-3.5 per cent sequential growth (assuming ATCO revenues for one month).. Wipro had entered into a multi- million dollar dual pact with Canada-based ATCO earlier this month. Under the deal, Wipro will provide a complete suite of outsourcing solutions to the Canadian firm as well as acquire its IT services arm.. Nomura cut its target price on Wipro from Rs 600 to Rs 560 saying sequential growth momentum has yet to see a pick-up versus the previous year. Broad-based growth continues to elude Wipro with sluggish growth in large segments like US/Europe/Retail/BFSI. Wipro's competitive positioning in developed markets is weaker vs its peers, it added.. For Nomura, Wipro remains the "least-preferred choice" among Tier-1 IT stocks. The brokerage has a neutral rating on the stock.. However, Phani Sekhar of Angel Broking told NDTV that he expects Wipro to clock 4 per cent revenue growth in Q2. He said investors should use the correction buy Wipro as a lot of positives in Q1 earnings will take time to reflect.. "Utilisation has gone up by 300 basis points... margins have gone up by 250 basis points year-on-year," Mr Sekhar added.. Wipro expects to surge ahead of rival Infosys later in the year. According to Thomson Reuters SmartEstimates, Wipro is expected to post dollar revenue growth of 9.9 per cent in 2014-15 fiscal as compared to TCS' 16 per cent and Infosys' 8.3 per cent growth.. As of 09.33 a.m., Wipro traded 6 per cent lower at Rs 542 after recovering from an intraday low of Rs 530. The stock underperformed the BSE's IT sub-index, which traded 1 per cent lower.

Wipro Sinks 8% as Q1 Growth Lags Infosys, TCS

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