IT giant, Wipro's bonus issue is among much-awaited rewards in the sector. Wipro's stock has outperformed its peers like TCS and Infosys, on monthly and year-to-date basis in 2024. Currently, the latest recommendation on the stock is to hold. Brokerage Geojit has set a new target price of Rs 582 owing to surge in large deals which is expected to support the company's overall growth in long term.
Wipro Share Price:
After market hours of November 8. Wipro share price stood at Rs 568.85 apiece, up by 1% on BSE with market cap at Rs 2.97 lakh crore. YTD, Wipro shares are up by 19.2%. Since last month, the stock has gained by 7%. With that, Wipro outperforms its counterparts.
TCS's monthly performance is down by 2.5%. While its YTD performance has seen single-digit upside of 8.8% on BSE.
Meanwhile, Infosys shares have dipped by 6.5% in a month. YTD though, the stock is up by 17.7% so far.
HOLD Wipro Stock:
On its valuation, Geojit said, "Good growth of large deal wins will support the company's overall long-term performance. In fact, a strong deal pipeline is also expected to buoy recovery in Europe and APMEA markets."
The brokerage added that cost-cutting measures will offset ongoing momentum towards vendor consolidation, thereby providing further support. However, Q3FY25 revenue is expected to remain soft, owing to seasonal furloughs and less working days. Further, margins are expected to remain in the narrow band of the guidance.
Hence, Geojit said, "We reiterate our HOLD rating on the stock, based on 23x price/earnings ratio on FY26E adj. earnings per share, with a revised target price of Rs.582."
In Q2FY25, Wipro surpassed stimates by earning 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.
Meanwhile, in the quarter, consolidated revenue came in at Rs 22,301.6 crore in Q2FY25, however, declining by 0.95% from PAT of Rs 22,515.9 crore in Q2FY24. But revenue was up by 1.54% from revenue of Rs 21,963.8 crore in Q1FY25.
For the quarter ending December 31, 2024 period (Q3FY25), Wipro expects its revenue growth in the IT Services business segment to be in the range of $2,607 million to $2,660 million. This translates to sequential guidance of (-) 2.0% to 0.0% in constant currency terms.
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 a strong track record of bonus issuance. The last bonus issuance by Wipro was a 1:3 ratio in March 2019. This followed a bonus issue of 1:1 in June 2017, and a 2:3 bonus issue in June 2010.
Further, the company delivered 1:1 bonuses and 2:1 bonuses in August and June of 2005 and 2004 respectively.
Wipro is a leading technology services and consulting company focused on building innovative solutions that address clients' most complex digital transformation needs.
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