Wipro, India’s fourth-largest IT services company, suffered a significant stock drop on Monday after reporting disappointing Q1 results. Shares plummeted by 8%, their largest decline in over four years. The slump comes amidst a strong performance by Wipro’s rivals, including TCS, Infosys, and HCLTech, who reported robust growth and positive outlooks.
Wipro’s Q1 revenue declined, and the company forecast a weak current quarter, with growth ranging from a 1% drop to a 1% increase. The weak performance contrasts with the optimism surrounding the $254 billion IT sector, where rivals are reporting strong demand recovery.
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The underwhelming results prompted analysts to downgrade their ratings and target prices for Wipro. Concerns about Wipro’s ability to achieve future growth have intensified due to broad-based revenue pressures, muted guidance, and a decline in deal wins. While competitors like Infosys saw a 78% increase in contract wins, Wipro saw a 11% drop.
Wipro’s stock decline and analyst concerns raise questions about its future trajectory. Its underperformance against competitors highlights a significant challenge in capturing growth opportunities within the recovering IT market.