IT major Wipro’s shares sink 7% a day after its March quarter results

Shares of IT major Wipro on Thursday tumbled almost 7% after the company’s March quarter earnings missed street expectations.

Shares of software major Wipro were trading down 6.5% in intra day on the BSE after brokerages gave a thumbs-down following the company’s muted growth as seen in its recent March quarter earnings.

File photo of Wipro chairman Azim Premji. (Agency Photo)

The stock was trading at Rs 561.25 at 12:45 PM as investors, disappointed with the quarterly performance sold the shares to book previous gains.

In its post earnings report, Mumbai-based brokerage Emkay Global said Wipro missed expectations both on growth and margins. “More importantly June’16 quarter revenue guidance of 1-3% implies that the revenue growth outlook is way below historical trends. We believe that these results will be a reality check for the optimism in Wipro because of new leadership and the associated talk of aggressive growth plans. Wipro is our least preferred stock in the Tier I space and we do not see any change in our stance for now.”

On the NSE, shares of Wipro were down 6.7% Rs 560.55 even as the broader Nifty index was up 0.23%. Most blue chip shares on the NSE are up in intra day trade.

Indian IT stocks have seen a mixed reaction to their earnings so far. The top three companies have announced their quarterly numbers with both TCS and Infosys seeing a good response on the street.

On Thursday, in intra day trade, TCS was flat on the BSE at Rs 2,448.55, while Infosys was down 1% at Rs 1230.45.

Reliance Securities said it expects Wipro to show subdued margin based on acquisition-led dilution and investments in digital.