Wipro Ltd. slumped in Mumbai trading, poised for its biggest drop in six months, after the software exporter posted sales growth that trailed that of larger rivals Tata Consultancy Services Ltd. and Infosys Ltd.
Shares fell 5 percent to 488.85 rupees as of 10:58 a.m. in Mumbai, headed for the largest decline since April 22. The stock, which surged to a 13-year high yesterday before the earnings announcement, was the worst performer on the benchmark S&P BSE Sensex, which slid 0.5 percent.
Morgan Stanley and Jefferies Group LLC said there is limited scope for the stock to gain after surging more than 30 percent in the past three months, and delivering sales growth that lagged behind peers. Billionaire Chairman Azim Premji’s Wipro reported sales rose 19 percent in the three months ended September, compared with Infosys’s 32 percent increase and 34 percent at Tata Consultancy.
“We note that Wipro’s growth is lowest among peers,” Vishal Agarwal, a Mumbai-based analyst at Jefferies, wrote in a note to clients yesterday. “We remain positive on the sector; however we prefer to play it via” other companies, he wrote.
Slow growth at Wipro’s business process outsourcing unit, which contributed about 8.6 percent of revenue, “continues to drag overall growth of the company,” Vipin Khare and Gaurav Rateria, analysts at Morgan Stanley, wrote in a note to clients.
Net income was 19.3 billion rupees ($313 million) in the three months ended September, Bangalore-based Wipro reported after the market closed yesterday. The profit beat the 18.4 billion-rupee median of 44 analysts’ estimates compiled by Bloomberg.