Mega IT company, Wipro has gained significantly throughout 2024 so far. The IT giant's weekly gains are about 3.4% on BSE, while the monthly and half-yearly performance is also up by 4% and 22% respectively. Amidst healthy performance despite encountering a period bearish market, Wipro has outperformed peer TCS which is the largest IT stock currently in India. Going ahead, Wipro will be in focus for its upcoming bonus issue record date. Brokerage JM Financial has recommended BUY for a target price of Rs 640 apiece.
Wipro Share Price:
After market hours of October 29, Wipro stock ended at Rs 562.20 apiece, up by 0.61% on BSE with a market cap of Rs 2,94,114.13 crore. The stock is currently a couple of rupees away from its 52-week high of Rs 580 apiece.
YTD, Wipro is up by 18%, outperforming TCS which gained by nearly 7% on BSE.
Wipro Bonus Issue:
The tech player has announced the issuance of bonus equity shares in the proportion of 1:1. This means that the company will allot 1 (One) bonus equity share of Rs 2/- each for every 1 (One) fully paid-up equity share held and a bonus issue.
Wipro earlier said, "The record date for reckoning eligible shareholders entitled to receive bonus shares will be communicated later." Further, Wipro emphasized that the actual number of bonus equity shares to be issued will be determined based on the fully paid-up equity share capital as of the record date.
Wipro has free reserves or share premium of Rs 10,462,971,564. The actual paid-up share capital will be determined based on the paid-up share capital as of the record date. The aggregate amount of free reserves, securities premium account and capital redemption reserve account, is up to Rs 568,080 million as of September 30, 2024.
JM Financial On Wipro:
In its latest report, JM Financial said, "There are still areas that need fixing. E&U continues to be beset by client-specific ramp-downs. Manufacturing remains a work in progress. These, alongside seasonal weakness, informed an underwhelming 0-2% cc QoQ guidance for 3Q. Margin performance (+35bps QoQ) despite wage hikes (1 month impact) remains a bright spot. WPRO reiterated its target band of 17-17.5%, which now looks increasingly achievable."
" As we have argued before, WPRO's guidance has a recency bias and fails to capture underlying improvements. Deal wins, financial services momentum, headcount growth and stability in senior leadership are building blocks for a return to a sustainable growth trajectory," JM added.
On the valuation, JM's note said, " We have raised our FY24-27E EPS by 1-4%, largely on the back of better margin assumptions. WPRO's healthy cash reserves and an indication of potential revision in capital allocation policy provide downside support. BUY." The target price is Rs 640 which has been raised from an earlier estimate of Rs 630.
In Q2FY25, Wipro beats estimates by earning a consolidated net profit of Rs 3,209 crore (attributable to owners), registering a growth of a whopping 21.25% year-on-year and 6.85% quarter-on-quarter. In dollar terms, the company's IT services segment revenue was at $2,660.1 million, an increase of 1.3% QoQ and a decrease of 2.0% YoY. While non-GAAP constant currency IT Services segment revenue increased 0.6% QoQ and decreased 2.3% YoY.
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