Wipro's stock has best day in 16 years amid signs IT consulting has bottomed
By Tomi Kilgore
Fellow India-based IT consultant Infosys' stock surges again, after breaking a string of disappointing earnings reports
Shares of Wipro Ltd. rocketed Friday, after the India-based information-technology consultant beat fiscal third-quarter profit expectations, to snap a streak of earning misses amid a jump in large deals, fueling hopes that a bottom in the IT business has been hit.
"In a seasonally soft quarter, deal booking momentum remained strong," said Wipro Chief Executive Thierry Delaporte. "Our large deals recorded a 20-percent year-to-date growth."
Meanwhile, shares of fellow IT consultant Infosys Ltd. (INFY) (IN:531219) surged again, toward a 13-month high, a day after breaking a streak of disappointing earnings reports.
Wipro's U.S.-listed stock (WIT) (IN:507685) shot up 17% to $6.28, the highest close since May 17, 2022. The stock also posted its biggest one-day gain since it ran up 22.8% on Oct. 28, 2008.
Delaporte said he was "starting to see early signs" of a return to growth in IT consulting, as the Capco business the company acquired in 2021 experienced growth in order bookings in the double-digit percentage range.
Wipro reported early Friday net income that fell to INR27.01 billion ($326 million), or INR5.15 a share, from INR30.65 billion, or INR5.56 a share, in the same period a year ago. That beat the FactSet consensus for earnings per share of INR5.10.
Revenue fell 4.4% to INR222.05 billion, ($2.7 billion), to beat the FactSet consensus of INR221.50 billion.
The company had missed EPS and revenue expectations in the past three quarters, and in six of the past seven quarters.
Infosys' U.S.-listed shares rallied 4.1%, after jumping 4.0% the day before, toward their highest close since Dec. 5, 2022.
The stock had suffered its biggest one-day losses over the past three years on the days that the three previous earnings reports were released. It dove 6.5% on Oct. 12, 2023, sank 8.4% on July 20 and tumbled 9.8% on April 13.
On Thursday, the company reported fiscal third-quarter EPS that slipped to 18 cents from 19 cents, but was above the FactSet consensus of 17 cents. That also snapped a three-quarter streak of bottom-line misses.
Like Wipro, Infosys said results were boosted by "strong" wins in large deals.
Revenue inched up 0.1% to $4.66 billion, but came up shy of expectations of $4.71 billion, according to FactSet.
Wipro's stock has rallied 29.2% over the past three months and Infosys shares have climbed 16%, while the iShares MSCI India ETF INDA has advanced 12.4% and the S&P 500 index SPX has gained 10.5%.
-Tomi Kilgore
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
01-14-24 2034ET
Copyright (c) 2024 Dow Jones & Company, Inc.-
What’s Happening in the Markets This Week
-
Worst-Performing Stock ETFs of the Quarter
-
Q3 in Review and Q4 2024 Market Outlook
-
Top-Performing Stock ETFs of the Quarter
-
September Jobs Report Forecasts Show Moderate Hiring Gains
-
Port Strike a Headache for Shippers but a Potential Tailwind for Certain US Transport Stocks
-
13 Charts on Q3′s Roller-Coaster Rally for Stocks and Bonds
-
5 Stocks to Buy Instead of Overpriced US Equities
-
Consumer Defensives: Despite Angst, Thirsty Investors Have Names to Pursue
-
Industrials: Many Stocks Overvalued After Q3 Outperformance
-
Basic Materials: Despite Index Rise, We See Multiple Long-Term Opportunities
-
What the Election Could Mean for Big Tech Stocks
-
3 Lessons From Recent Stock Market Drama
-
Consumer Cyclicals: Even Amid Moderating Consumer Spending, We See Discounts
-
Healthcare: Valuations Look Fair Overall, With Select Industries Still Undervalued
-
Utilities: Falling Interest Rates, Growth Outlook Boosting Stocks