HomeMarket NewsWipro’s ADR slumps the most in 16 years as guidance disappoints
Reacting to the weak quarterly numbers, the American depository receipts (ADR) of Wipro slumped over 11% on the NYSE on July 19.
By Yoosef K July 19, 2024, 10:48:53 PM IST (Published)
US-listed shares of Wipro plunged on Friday (July 19) after the company’s June quarter revenue missed analysts’ estimates. The information technology (IT) services revenue of the company declined by 1% sequentially to $2.63 billion. June quarter also marks the sixth quarter in a row in which the top line has been falling on a sequential basis.
Reacting to the weak quarterly numbers, the American depository receipts (ADR) of Wipro slumped over 11% on the NYSE on July 19. The Friday’s plunge was the biggest single-day fall after December 2008, Bloomberg data show.
At 11.01 am Eastern Daylight Time, the company’s ADR on NYSE were trading at $6.13. One receipt is equivalent to one share of the company. “We did not see a significant shift in the demand environment in Q1. Clients remain cautious and our discretionary spending continued to be muted,” said Srinivas Pallia, MD & CEO of Wipro post Q1 results.
Also Read: Wipro Q1 Results: Second quarter growth seen between -1% to +1%; Large deal wins of $1.2 billion
However, despite falling revenues sequentially, the company has managed to maintain its operating margin. The Earnings Before Interest and Taxes (EBIT) margin of Wipro increased marginally to 16.5% in Q1FY25 from 16.4% reported in the March quarter of FY24. “We are confident that we can sustain our margins within a narrow band with an upward bias in the coming quarter,” Pallia added.
While the Banking and Financial Services (BFSI) segment retained its positive momentum, other sectors like manufacturing & energy and utility posted weak numbers during the quarter. Additionally, the large total contract value (TCV) of Wipro stood at $1.2 billion, down 3% quarter-on-quarter.
Shares of Wipro pared initial gains on Friday to close the session at ₹557.20 on the NSE, down 3% from the previous close. Interestingly, the sudden drop in shares was recorded after hitting its 52-week high of ₹580. Between January and now, the stock has generated a return of 18.2%, while it rallied about 20% last year.
Also Read: Cognizant pays $505,087 to settle Wipro’s case against CFO Jatin Dalal
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