Wipro shares fall 11% after weak sales forecast

Wipro’s shares plunged 9.36% to Rs.334.15 at 11.04am on Monday on BSE. The exchange’s benchmark index rose 0.11% to 19,037.06. Photo: Pradeep Gaur/Mint
 Live mint :Anirban Sen  Mon, Apr 22 2013. 09 28 AM IST

Wipro joins Infosys in delivering tepid revenue outlook, citing tough macroeconomic conditions

Bangalore: Shares of India’s third-largest software services provider Wipro Ltd fell as much as 11.02% in early morning trade on Monday, after the company gave a weaker-than-expected sales forecast for the June quarter.

On Friday, Wipro posted a profit that beat market expectations, but disappointed investors with a weak revenue forecast for the first quarter of fiscal 2014, raising concerns over whether the turnaround plan overseen by chief executive T.K. Kurien was working. Earlier in April, larger rival Infosys Ltd also disappointed market expectations by giving an annual revenue growth forecast of 6-10%, citing tough macroeconomic conditions. The forecast was less than industry lobby Nasscom’s prediction of 12-14% growth for software exports revenue in fiscal 2014.

Wipro has forecast revenue in the range of $1.57-1.61 billion for the quarter ending June.

“A poor March 2013 top-line (revenue) report and a soft June 2013 dollar-revenue growth guidance of (0.6)-1.6% quarter-on-quarter indicates Wipro’s turnaround is still quite some time away. Such a weak start to the year yet again implies much of the onus of delivering revenue upsides will fall on 2HFY14, visibility for which remains very low,” CLSA analysts Nimish Joshi and Arati Mishra said in a note to clients.

The weak forecast from Wipro and Infosys was in sharp contrast to Tata Consultancy Services Ltd’s outlook after its earnings last week. TCS said it would exceed Nasscom’s growth forecast for the year. Last week, HCL Technologies Ltd also posted strong earnings and gave a positive outlook for the year ahead.

Wipro’s shares plunged 9.36% to Rs.334.15 at 11.04am on Monday on BSE. The exchange’s benchmark index rose 0.11% to 19,037.06.