Wipro dips 5% on weak revenue guidance for Q1FY19

Shares of Wipro have dipped 5% to Rs 274 per share on the market in early morning trade after the India's third-largest information technology (IT) services company has gave a disappointing revenue growth guidance of -2.3% to 0.1% in CC (constant- currency) terms for the April-June quarter of 2018-19 (Q1FY19).
The company posted 6.69% quarter on quarter (QoQ) drop in its net profit at Rs 18 billion for the fourth quarter of 2017-18 (Q4FY18). Gross revenues were almost flat at Rs 137.7 billion, with a growth of 0.7% over the previous quarter.

Analysts on an average expected profit of Rs 21 billion and revenues of Rs 139 billion for the quarter.

“Actual growth may even be lower depending on the timing of divestiture of its hosted data centre services (DCS) business to ‘Ensono’ during Q1FY19 for US$405mn,”analysts at Emkay Global Financial Services said in results update.

“We reduce earnings estimates for FY19/20E by 3%/4%. Valuation at 16.1x/14.9x FY19/20E EPS are full in light of sub-par growth v/s peers. Retain REDUCE with TP of Rs 250 (valued at 13x FY20e earnings),” it added.