Wipro shares slide to 3-month low, weighs on IT peers on weak revenue forecast

While the IT sector has been contending with soft demand for the past few quarters, leading to the likes of Infosys cutting its full-year forecast, analysts believe Wipro’s higher exposure to consulting hurt it more than its peers.

“Given Wipro’s broader presence in the discretionary areas, the conversion is a challenge as enterprises are cautious and are reprioritising expenditures,” Motilal Oswal said in a note.

Wipro said it expects its IT services revenue, which is nearly all of its business, would drop 3.5% to 1.5%, on a constant currency basis, sequentially in the third quarter. That is steeper than the 0.5% sequential drop in the second quarter.

The company’s shares were last down 3.3% at 394 rupees, trimming their year-to-date gain to 0.3%. In comparison, the Nifty IT index has risen nearly 10% so far this year.