Shares of Wipro Ltd. fell sharply in India the day after the information-technology company posted a weaker-than-expected quarterly profit.
Wipro’s stock slid 5.6% to INR385.00 in Thursday trade, heading toward its biggest one-day percentage fall in almost five months. It has lost 46% in the year to date. The company’s ADRs closed 3.4% lower at $4.59 on Wednesday, bringing year-to-date losses to about 53%.
The Indian company posted net profit of 26.59 billion rupees ($323.6 million) for its fiscal second quarter that ended in September, down 9.3% from a year earlier, it said in a late Wednesday filing. That is weaker than the INR28.38 billion consensus estimate taken from a FactSet poll of analysts.
Revenue rose 15% to INR225.40 billion, though analysts were looking for INR226.90 billion, according to FactSet.
Wipro is guiding for sequential IT-services revenue growth of 0.5%-2.0% to $2.81 billion-$2.85 billion in the December quarter, which Citi analysts said in a note is “slightly below expectations.”
The U.S. investment bank keeps a sell rating on Wipro, citing pressure on near-term profitability given factors including supply-side challenges and limited pricing power.
Citi has a cautious view on India’s IT sector overall due to growth concerns, as “the worsening macro starts to be reflected in numbers and valuations, which are still above prepandemic levels,” it said.