Wipro ADRs Falls Over 4% On Lower Q3 Guidance

The American Depository Receipts of Wipro Ltd. was trading over 4% lower on Thursday after it reported its second quarter earnings on Thursday.

The ADR of the tech major fell as much as 4.21% to $6.150. The scrip opened at $6.345 but later fell to 4.21% lower as of 9:37 a.m. EDT.

The software services provider now expects third-quarter revenue to decline by up to 2% or remain flat in constant currency terms. The company had previously forecasted a revenue change of up to 1% in either direction for the second quarter.

Wipro's net profit rose over 6% sequentially to Rs 3,227 crore for the three months ended September. This is over the Rs 3,625 crore profit expected by analysts tracked by Bloomberg.

The revenue for the quarter rose 1.5% to Rs 22,302 crore in comparison to Bloomberg's estimate of Rs 22,235 crore. The company on Thursday also said that it expects the revenue from IT services to be in the range of $2,607 million to $2,660 million.

Total bookings came in at $3,561 million, with large deal bookings at $1,489 million, an increase of 28.8% quarter-on-quarter and 16.8% year-on-year in constant currency. Capco has also maintained momentum for another consecutive the company added.

The shares of Wipro closed lower on Thursday. The shares fell as much as 1.33% during the day to Rs 525.05 apiece on the NSE. The stock closed 0.64 lower at Rs 528.75 per share. This compares with a 0.28% decline in the benchmark Nifty 50. It has risen 28.52% in the last 12 months and 10.81% year-to-date.

Out of 42 analysts tracking the company, eight maintain a 'buy' rating, 10 recommend a 'hold,' and 24 suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies a downside of 1.6%.