Shares of Wipro fell as much as 2.28 per cent on both the BSE and National Stock Exchange (NSE) in the early trade on Friday after the company announced that its Managing Director (MD) and Chief Executive Officer (CEO) Abidali Z Neemuchwala is stepping down due to family commitments.
The stock slipped to Rs 235.30 on the BSE and to Rs 235.20 on the NSE. In terms of trade volumes, over 21.86 lakh shares of the company have been traded so far on NSE while on BSE over 92 thousand shares have exchanged hands in the intraday trade.
Neemuchwala will continue to hold the position until his successor is appointed by the company to ensure a smooth transition. Meanwhile, the company’s board of directors has initiated the search to identify the next CEO, the management said in a statement.
He was elevated to the position of CEO from Chief Operating Officer (COO) on February 1, 2016.
The information technology (IT) services company had earlier this month reported a 2.17 per cent year-on-year fall in its net profit for the quarter ended December (Q3).
“Wipro is one among the top four companies that have existed for more than 25 years, but in recent times it has failed to take their business to the next level in terms of IoT, digital platform and cloud computing. Other major IT companies such as TCS, Infosys and even Tech Mahindra have transformed their businesses but Wipro is finding it difficult. We are not recommending Wipro and we have been traditionally negative on the stock of this company,” AK Prabhakar, Head of Research at IDBI Capital told indianexpress.com
Neemuchwala’s resignation is further expected to be negative for the company in the near term, he added.
Prabhakar further explained that the earnings before interest and tax (EBIT) margin of Wipro is around 17 per cent, in comparison the EBIT margins of TCS is around 26 per cent while that of Infosys is around 24 per cent.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines