Wipro, LTIMindtree Shares in Focus Ahead of Q1 Results
Indian IT majors Wipro and LTIMindtree are set to release their first-quarter financial results, and the market is eagerly waiting for the outcome. The shares of both companies traded lower in early trade on Thursday, with Wipro’s stock declining as much as 0.9% to Rs 260.5 apiece on the National Stock Exchange (NSE).
LTIMindtree’s stock, on the other hand, fell as much as 0.8% to Rs 5,285 apiece on the NSE. The relative strength index (RSI) of both stocks was 49 and 50, respectively, indicating a neutral trend.
Analysts expect Wipro to report a net profit of Rs 3,249.3 crore and total income of Rs 22,078.3 crore for the quarter ended June, according to a survey of analysts’ estimates done by Bloomberg. The company is expected to post an earnings before interest and tax (EBIT) of Rs 3,783 crore, with margin likely to be at 4%.
LTIMindtree is likely to report an net profit of Rs 1,194.1 crore and revenue of Rs 9,855.4 crore for the first quarter, according to estimates. Its EBIT is expected at Rs 1,416 crore, while margin will be at 3%.
What’s Driving the Volatility?
Analysts anticipate a soft quarter for Wipro, driven by persistent weakness in European markets and limited demand recovery. Price sensitivity from clients, headwinds from vendor consolidation, and ongoing project ramp-downs are also expected to weigh on topline growth.
Guidance for the second quarter will be closely watched, with most firms expecting a narrow range of -1.5% to +0.5% sequential revenue growth. Analysts also see potential downside risks to margins due to lower utilisation and limited pricing power in the current environment.
What’s Next for Wipro and LTIMindtree?
Wipro and LTIMindtree will need to demonstrate strong execution and cost management to justify their valuations. The companies will also need to provide guidance for the second quarter and beyond to alleviate investor concerns.
The Indian IT sector is expected to face challenges in the coming quarters, with clients being cautious about spending due to macroeconomic uncertainty. However, the sector’s long-term prospects remain strong, driven by the growing demand for digital transformation and cloud services.
Nifty Consolidates Ahead of Major Earnings
The Nifty 50 index was down 0.1% at 17,544.15 points, while the Nifty IT index declined 0.3% to 30,431.25 points, as of 10:45 am. The benchmark Sensex was down 0.1% to 59,343.21 points.
The total traded volume of Wipro’s stock was Rs 39.51 crore, while that of LTIMindtree was Rs 17.58 crore, as per NSE data.
Conclusion
In conclusion, Wipro and LTIMindtree shares are likely to remain volatile ahead of their Q1 results. Investors will be closely watching the results and guidance provided by the companies to gauge their performances. The Indian IT sector’s long-term prospects remain strong, driven by the growing demand for digital transformation and cloud services. However, the sector’s short-term challenges cannot be ignored, and investors will need to be cautious while making investment decisions.
