Moneycontrol Bureau
Shares of Wipro tanked 4 percent intraday Fridayh after it announced June quarter results. Wipro 's first quarter consolidated profit declined 3.7 percent sequentially to Rs 2,187.7 crore on lower other income and higher finance cost. However, quarterly revenue met street expectations.
However, that is not enough to be in 'buy' portfolio of analysts. Kotak has downgraded the stock to reduce from add. It has also cut FY2016-17 earnings by 1 percent/4 percent. It states Wipro will struggle to be a core portfolio bet due to a long history of missed strategic opportunities. "Headline numbers were in line but weak in composition. years of investments have failed to improve account-mining metrics," it adds in a note.
CLSA also rates it underperform with a target of Rs 630 per share, stating it will shy away from looking for value until execution appears settled. Terming Wipro 'Swimming against the tide', CLSA says soft Q2 guidance suggests persistent issues in account mining and a lack of leadership verticals. Wipro expects its IT services dollar revenue to be in range of USD 1.82-1.85 billion in July-September quarter of FY16, a growth of 1.5-3.5 percent over June quarter, which was in line.
However, CLSA has raised FY16 earnings per share (EPS) by 4 percent on lower taxes.
Bank of America Merill Lynch retains neutral rating on Wipro due to lack of near-term trigger and benign valuation.
At 10:05 hrs Wipro was quoting at Rs 574.95, down Rs 13.45, or 2.29 percent on the BSE.
Posted by Nasrin Sultana
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