Wipro Soars Most in Four Years After Forecasting Record SalesRajhkumar K Shaaw
Wipro Ltd., India’s third-largest software exporter, had its biggest rally in four years after forecasting record sales.
The shares jumped 6.8 percent to 408.05 rupees at the close in Mumbai, the biggest climb since July 20, 2009. The stock was the best performer on the benchmark S&P BSE Sensex, which fell 0.8 percent. Bangalore-based Wipro predicts revenue will rise to $1.61 billion to $1.65 billion in the quarter ending Sept. 30, according to a July 26 statement. The guidance is the strongest in more than two years, according to Espirito Santo Securities.
Kotak Institutional Equities, Religare Capital Markets and Espirito Santo increased their earnings estimates after Wipro joined rival Tata Consultancy Services Ltd. in signaling higher demand for outsourced software work. Billionaire Chairman Azim Premji said July 26 the company is seeing higher confidence among its customers amid “positive macroeconomic developments,” in the U.S., its largest market.
“Wipro seems to have got its mojo back,” Dipen Sheth, head of institutional research at HDFC securities Ltd., told Bloomberg TV India today. The company has given “bullish guidance after many, many quarters. This signals change in trajectory for Wipro,” he said.
The August-contract volume in Wipro futures increased 51 percent to 8,503, data complied by Bloomberg show.
Wipro on July 26 said first-quarter net income rose 2.5 percent to 16.2 billion rupees ($275 million) in the quarter ended June. That matched the median of 38 analysts’s estimate compiled by Bloomberg. The Bangalore-based company posted sales of 97.3 billion rupees, missing analysts’ estimates.
The forecast for IT revenue in the second quarter is based on 57.24 rupees to a dollar, the company said in a statement. Revenue from software services increased to $1.59 billion in the period, in line with its April forecast of $1.575 billion to $1.61 billion for the period.
“The volume is going to come from the bread-and-butter businesses while the profitability impact is going to come from” advanced technology businesses, T.K. Kurien, chief executive officer, said in an interview to Bloomberg TV India. “That gives us the confidence on our margins.”
Revenue from Wipro’s new technology business has risen 9 percent from the preceding quarter, Kurien said.