Wipro Outperforms Market on Strong Trading Day

Wipro, a leading Indian IT services and consulting company, has delivered a strong performance in the third quarter of FY25, outpacing market expectations and driving its stock price higher. The company's robust quarterly results, announced on January 17, 2025, have sparked investor interest and contributed to a surge in its share price.



Wipro's revenue grew by 0.1% quarter-on-quarter (QoQ) and 0.5% year-on-year (YoY) in the third quarter, beating market estimates. The company's operating margin expanded by 0.7% QoQ and 1.5% YoY, reaching a 17.5% margin – the highest in the past three years. Net income grew by 4.5% QoQ and 24.5% YoY, while earnings per share (EPS) increased by 4.6% QoQ and 24.4% YoY. Operating cash flows were at 146.5% of net income, indicating strong cash generation.



Wipro's growth was driven by execution rigor and continued demand uptick in Capco, its consulting and technology business. The company posted revenue growth in the upper end of the guided range, which was primarily driven by the pickup in demand environment and deal pipeline. Wipro also closed 17 large deals with a total value of $1 billion, demonstrating its ability to win strategic and high-value contracts.



Brokerages such as IDBI Capital, Nirmal Bang, and Motilal Oswal have maintained their 'hold' or 'neutral' ratings on Wipro's stock, citing the company's strong performance and positive outlook. However, they have also expressed caution about the sustainability of this growth, given the weak performance in certain verticals and geographies.

Wipro's strong performance in a seasonally weak quarter has sparked investor interest and contributed to a surge in its share price. The company's ability to deliver above the top end of its revenue guidance and achieve its highest margins in the past three years has solidified its position as a leading IT services provider. As the company continues to focus on strategic initiatives and drive growth, investors should keep a close eye on Wipro's performance in the coming quarters.

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