Wipro Shares Jump To A Record High On Higher Q1 Revenue Guidance
Entrance of Wipro’s headquarters in Bengaluru, India. (Photo: BloombergQuint)

Wipro Shares Jump To A Record High On Higher Q1 Revenue Guidance

Shares of Wipro Ltd. jumped to a record after the software services provider raised its revenue guidance on completing the acquisition of London-based management consulting company Capco.

Wipro expects revenue from IT services business to range between $2.32 billion and $2.37 billion, according to an exchange filing. That compares with its earlier forecast of $2.2-2.24 billion.

“This translates to a sequential growth of 8-10%. This does not include revenue from our recently announced acquisition of Ampion,” the Bengaluru-based IT company said.

Wipro in March had signed an agreement to acquire Capco for $1.45 billion to help scale up its banking, financial services and insurance segment. A successful completion of the deal, according to analysts, was key to aid the IT company’s U.S. dollar revenue, create cross-selling opportunities and bolster BFSI capabilities.

(Read what brokerages made of the acquisition here)

Wipro’s revenue from IT services rose 3.9% sequentially to $2,152.4 million in the quarter ended March. It had forecast 1.5-3.5% dollar revenue growth in the fourth quarter. The company’s net profit met estimates, while margin narrowed in the reported period.

Wipro's stock climbed as much as 4.51% around 10:30 a.m. on Friday to Rs 511.95 apiece, before paring some of its gains. Its trading volume was 87% above the 20-day average for this time of day. The relative strength index on the stock was above 70, indicating it may be ‘overbought’.

Wipro Shares Jump To A Record High On Higher Q1 Revenue Guidance

Of the 48 analysts tracking Wipro, 21 recommend ‘buy’, while 16 suggest ‘hold’ and 11 have a ‘sell’ rating, according to Bloomberg data. The stock is trading 9% higher than its average of 12-month consensus price targets compiled by Bloomberg.

The stock has risen 165% in the last 12 months compared with the 46% jump in the Sensex.

Also read: Wipro Q4 Results: Large Deal Wins Drive Revenue Growth, Margin Contracts

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