Investor concerns are high as Wipro shares fall by 47% over the past two years

One of India’s largest IT firms, Wipro Ltd., has experienced a decline of 47% in shares from their record all-time high in nearly two years. Wipro stock hit an all-time high of Rs 726.70 on 3 January, 2023. On 25 October, 2023, Wipro stock closed at Rs 382.05, falling by 47.42% from its record high during the two-year period.

However, Wipro stock has turned flat in the previous year and on a year-to-date basis. The stock went down by 2.81% in 2023 and has fallen just 0.64% in a year.

On the technical charts, the stock of Wipro is exhibiting signs of being oversold, as indicated by its relative strength index (RSI) at a low value of 26.9. Over the past year, the stock has displayed considerable volatility, with a beta of 1.1. Notably, Wipro's shares are currently trading below various key moving averages, including the 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day averages, indicating a bearish sentiment in the market.

In its latest trading session, Wipro, which boasts the lowest market price among the three prominent IT companies, concluded at Rs 382.05 on the BSE. The stock reached an intraday low of Rs. 381.25. Wipro's market capitalization on the BSE stands at Rs 1.99 lakh crore. During this session, a total of 1.38 lakh shares of the company were exchanged, resulting in a turnover of Rs 5.31 crore on the BSE.

Nuvama Institutional Equities has revised its target price for Wipro down to Rs 390 from the previous Rs 400, following the release of the company's Q2 earnings report. Wipro's lackluster performance in Q2 and its disappointing Q3 guidance highlight its ongoing challenges in converting deal wins into meaningful growth.

Nirmal Bang Institutional Equities has also lowered its target for Wipro's stock, reducing it to Rs 353 from Rs 358 earlier. The company is expecting a challenging performance period.

Nomura India has trimmed its target price for Wipro by 5 percent, setting it at Rs 400, and has adjusted its earnings per share (EPS) estimates for Wipro downward by 3-6 percent. Nomura India's EPS projections for FY24–26 are notably lower compared to the market consensus.

Wipro is anticipated to report a 4.5 percent decline in dollar revenue for FY24, a figure that is expected to be the weakest among its Indian IT industry peers. This may be attributed in part to Wipro's higher exposure to consulting services through its acquisitions of Capco and Rizing.

In its Q2 FY24 results, Wipro's performance was weaker than expected, with a marginal 0.48 percent decrease in profit compared to the previous year, resulting in a profit of Rs 2,646.3 crore. Additionally, the company reported a slight 0.1 percent dip in consolidated revenue from operations for the three-month period ending on 30 September, reaching Rs 22,516 crore, compared to Rs 22,540 crore during the same period in the previous year.