Wipro Shares Tumble 10% Following Disappointing Quarterly Forecast
Wipro shares experienced a sharp decline of 10% on Monday. The drop came after the company issued a weak revenue outlook for the fourth quarter. Investors reacted negatively to the news, causing the stock to hit 248.75 rupees. This made Wipro the biggest percentage loser on both the Nifty 50 and the IT index.
Weak Q4 Outlook and Deal Performance
Wipro expects its fourth-quarter revenue to be flat or show a modest increase of up to 2% sequentially. This forecast includes contributions from recent acquisitions. The company's total deal bookings for the third quarter stood at $3.34 billion. This figure represents the lowest level in six quarters, indicating a slowdown in new business.
Analysts from Jefferies pointed to softer deal wins and delays in project ramp-ups as key factors. These issues contributed to the weaker-than-expected growth outlook for the March quarter. The lackluster performance has raised concerns among investors about Wipro's near-term prospects.
Contrast with Industry Peers
Wipro's muted outlook stands in stark contrast to its larger competitors. Tata Consultancy Services and Infosys reported steady deal wins and better-than-expected revenue growth. This occurred despite the seasonally weak third quarter, highlighting Wipro's relative underperformance in the IT services sector.
On Friday, Wipro's American depositary receipts fell as much as 7.2%. This decline followed the release of the company's third-quarter results. The combined effect of the weak outlook and sluggish deal wins has significantly impacted investor sentiment.
The broader market indices also felt the pressure. The Nifty 50 declined by 0.5%, while the IT index dropped by 1%. Wipro's steep fall marks its most significant percentage loss since July 2024, underscoring the severity of the current market reaction.
