Tech giant, Wipro Ltd is coming up with bonus issue rewards on October 17, which will be the company's sixth bonus shares issuance in two decades. Wipro has a strong track record of delivering bonus issues, along with dividends, while it never carried a stock split. Wipro stock price is currently below Rs 540 and will be in focus this week for its bonus announcement and Q2 results for FY25. There is a BUY recommendation on Wipro.
Wipro Share Price:
After market hours on October 15, Wipro's share price ended at Rs 532.95 apiece, down by 3% on BSE, with a market cap of Rs 2,78,810.37 crore. The stock was nearly Rs 50 way from touching its 52-week high of Rs 580 apiece, while its 52-week low stood at Rs 375 apiece.
The stock's price-to-equity is at 31.31x, while the return on equity is at 15.41%.
Despite the latest dip, Wipro shares are up by 12% on BSE year-to-date. In a year, the stock is up by 29.96%. Wipro emerged as a multi-bagger with its 5-year gains of 114.21%.
Wipro Bonus Issue:
The Azim Premji-backed company has informed exchanges about the board meeting that will be held on October 17, 2024, to consider bonus issues.
The upcoming bonus issues will be Wipro's sixth bonus issuance in two decades. The last time Wipro rewarded investors with bonus shares was of 1:3 ratio in March 2019. This followed a 1:1 bonus issue in June 2017, a 2:3 bonus issue in June 2010, and a 1:1 bonus issue in August 2005.
The first bonus issuance by Wipro was of a 2:1 ratio in June 2004.
In total, Wipro has so far rewarded 7:9 bonuses.
BUY WIPRO Stock:
In Q2FY25, JM Financial expects Wipro's cc revenue growth to be flat sequentially, ~30bps cross currency tailwind should result in a 0.3% QoQ USD revenue growth for IT Services. Also, the brokerage expects the company's growth in BFSI (especially the US) to be offset by sustained weakness in E&U.
JM Financial does not expect a meaningful contribution from the USD 500mn Telecom deal in 2Q. While it has built in 1 month of wage hike (effective 1St Sep). However, operational efficiencies and favourable FX will likely aid 35bps sequential expansion in EBIT margin to 16.8%.
Finally, the brokerage expects Wipro to guide for a -1 to +1% QoQ cc growth in 3QFY25.
JM Financial has recommended BUY on Wipro for a target price of Rs 630 ahead.
The leading technology services and consulting company will announce results for the second quarter ended September 30, 2024, on Thursday, October 17, 2024, after stock market trading hours in India.
In Q1FY25, Wipro reported a consolidated net profit of Rs 3,003.2 crore, up 4.64% from a net profit of Rs 2,870.1 crore in Q1FY24 and also up by 5.95% from the profit of Rs 2,834.6 crore in the March 2024 quarter.
Meanwhile, consolidated revenue from operations came in at Rs 21,963.8 crore in Q1FY25, lower than revenue of Rs 22,831.0 crore in Q1FY24 and Rs 22,208.3 crore in Q4FY24. Further, the company's IT services segment revenue was at $2,625.9 million, a decrease of 1.2% QoQ and a decrease of 5.5% YoY. Also, non-GAAP constant currency IT Services segment revenue decreased 1.0% QoQ and 4.9% YoY.
In its guidance, during the June 2024 quarter, Wipro stated that it is revenue from its IT Services business segment in the range of $2,600 million to $2,652 million. This translates to sequential guidance of (-)1.0% to +1.0% in constant currency terms.
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