Wipro stock rose as much as 5% on Friday, making it the best performing sector, propelling the Nifty up 409 points to its intraday high.
This positive news, however, is tempered by ongoing concerns about Wipro’s near-term growth prospects compared to its peers.
The top contributor to the 50-stock index was Infosys while Wipro occupied the top spot in terms of percentage gains.
Wipro Price Target
Morgan Stanley maintained an underweight rating on the counter with a price target of Rs 421, implying potential downside risk of nearly 9%.
The brokerage believes the large deal win should be viewed positively in an environment where discretionary spending remains subdued.
Despite the deal win, the brokerage said the technology services and consulting company’s near-term growth may lag that of its peers, and the P/E gap may remain large until the growth gap narrows.
Earlier this month, the company announced it has collaborated with Zscaler to launch Wipro Cyber X-Ray, an AI-powered decision support platform.
Wipro Cyber X-Ray enables corporate CXOs to make optimized security investment decisions and communicate cyber assets to senior management and the board.
Analysts on Wipro Price
“The stock could touch Rs 550-600 levels by December. Keep the stop loss at Rs 400,” Kiran Jani, head of technical research at Jainam Broking told Business Today TV.
“A decisive breakout above the resistance level of Rs 493 willstrengthen the trend and further upsideisexpected in the coming days with higher targetlevels of Rs 505 and Rs 532 expected. Immediate support holds near the Rs 470 zone,” said Shiju Kootpalakkar, technical research analyst at Prabhudas Lilladher.
“Wipro has witnessed a strong upswing in the last few trading sessions. The Rs 468 to Rs 462 area is likely to cushion any near-term fluctuations, while sacred support lies in the Rs 450 sub-zone.
On the upper end, Rs 490-498 is a major hurdle and a decisive break will only trigger a fresh round of long positioning on the counter from a short to medium term perspective,” said Osho Krishan, Senior Research Analyst, Technical & Derivatives. AngelOne.
Wipro Stock Diversifying its Client Base
Some experts are still a bit cautious about Wipro. They’re concerned that the company’s growth might lag behind its competitors for a while. There are a few reasons for this concern.
One is that Wipro may not be investing as heavily in certain areas of technology that are seeing explosive growth, such as artificial intelligence and cloud computing.
These areas are becoming increasingly important for businesses of all sizes, and companies that can offer strong AI and cloud services are in high demand.
Additionally, Wipro has historically relied on a relatively small number of large clients for a significant portion of its revenue.
This concentration makes the company more vulnerable to downturns or changes in spending priorities at any of those clients. Diversifying its client base across more industries and company sizes could help Wipro mitigate this risk.
Wipro Stock Q4FY24 results
The company reported weaker than expected fourth-quarter results for the fiscal year ending March, with profits up 5.2% sequentially.
Consolidated net profit for the quarter stood at Rs 2,835 crore, down 8% year-on-year. The IT services provider reported a profit of Rs 3,074.5 crore in the same period last year.
Wipro Plans to Stay Competitive
Wipro is taking multiple steps to address analyst concerns about its growth. They’re investing in hot tech areas like cloud computing and artificial intelligence (AI) to expand their service offerings. This includes hiring new talent with specialized skills in these fields, as well as funding research and development projects.
Additionally, Wipro is actively working to diversify its client base. They’re trying to attract more business from smaller and medium-sized companies, as well as expanding into new industries.
This will help reduce Wipro’s reliance on a small number of large clients and make the company’s revenue stream more stable. Finally, Wipro is focusing on innovation more than ever before.
They’re encouraging their employees to come up with new ideas and develop cutting-edge solutions. This will help Wipro stay ahead of the curve in the tech industry and compete more effectively with its rivals.
