On January 20, Wipro's shares surged approximately 8% on Monday, marking their strongest performance in nearly four years as India's fourth-largest IT services company indicated a rebound in demand alongside its industry counterparts.
Exceeding third-quarter profit expectations and projecting potential revenue growth of up to 1% for the current quarter, CEO Srinivas Pallia noted, "We see discretionary spending slowly coming back" following macroeconomic challenges in 2024.
Analyst Piyush Pandey from Centrum Broking remarked, "The guidance shows improvement from the previous quarter, with deal bookings, especially in the small- to mid-sized range, suggesting a revival in discretionary tech spending."
Among the leading gainers on the Nifty 50 index, Wipro's stock saw upgraded ratings by at least eight brokerages, with 16 increasing their price targets based on LSEG data.
Echoing sentiments from larger industry peers, Wipro's outlook for a more promising 2025 follows a period where growth in the $254 billion IT services sector was hindered by client spending constraints due to macroeconomic uncertainties and inflation pressures.
Notably, Wipro's 11% revenue growth in the latest quarter from the BFSI (banking, financial services, and insurance) segment—representing about a third of total revenue—points to an uptick in discretionary expenditures, as highlighted by Jefferies analysts.
Asian Market Securities analysts highlighted Wipro's operating margin reaching a three-year high of 17.5%, surpassing their expectations and driven by strong deal execution.
Wipro anticipates revenue to fluctuate between a decline of 1% and an increase of 1% sequentially in the ongoing quarter. ($1 = 86.4390 Indian rupees)