Wipro Shares Jump To A Record High On Higher Q1 Revenue Guidance
Wipro’s stock climbed as much as 4.51% to Rs 511.95 apiece, before paring some of its gains.
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’.
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.