India's Wipro rises as Street pins hopes on new CEO after Q4 results

FILE PHOTO: Figurines with computers and smartphones are seen in front of Wipro logo in this illustration taken, February 19, 2024. REUTERS/Dado Ruvic/Illustration/File Photo

BENGALURU (Reuters) - Shares of Wipro rose as much as 2.4% on Monday, after India's No.4 software services exporter posted better-than-expected fourth-quarter results, while some analysts pinned hopes on new CEO Srinivas Pallia to anchor a turnaround.

Its shares were up 1.8% at 460.60 rupees by 10:10 a.m. IST, leading gains on the Nifty IT index, which is up 0.3%.

Still, the stock has lost about 4% so far this year, while larger rivals Tata Consultancy Services and Infosys have gained 1.4% and shed 8.5% respectively.

Wipro's quarterly revenue and profit came ahead of estimates, and Pallia said he will prioiritise growth at a time when India's $254 billion IT services industry grapples with reduced client spending due to high interest rates, geopolitical risks and economic uncertainty.

"We believe (the) new CEO will have to build upon the simplification of the organization that happened under Thierry Delaporte and improve deal wins," said Ambit Capital in a note.

"We believe he (Pallia) likely has a 3-year runway to deliver industry matching – if not industry leading – growth," wrote Nirmal Bang Institutional Equities in a note.

Earlier this week, Wipro's bigger rivals Infosys and Tata Consultancy Services posted lower-than-expected fourth-quarter revenue.

At least nine analysts cut their target price on Wipro after its results per LSEG data, and at least 11 downgraded the stock. The "sell"-rated stock's median target price has dropped to 445 rupees from 455 rupees on March 22.

(Reporting by Hritam Mukherjee in Bengaluru; Editing by Varun H K)

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