Wipro stock up 4% after Q2 revenue beat offsets concerns over weak deal wins

Wipro's shares experienced a nearly 4% increase on Friday following the IT firm's second-quarter revenue surpassing estimates and a signal that delayed significant deals may contribute to growth in upcoming quarters. This positive outcome was able to offset concerns about weak deal bookings and a subdued near-term outlook. The stock reached ₹180.76, marking its highest level since September 1, and was on track for its fourth consecutive day of gains.

Wipro disclosed that its second-quarter revenue amounted to ₹24,753 crore, exceeding analysts' expectations of ₹24,627 crore. The Bengaluru-based company forecasted third-quarter revenue growth ranging from a 1.5% decline to a 0.5% rise in constant currency terms. Additionally, the company reported a 45% drop in total bookings to $2.6 billion compared to the previous year.

These results contribute to indications of a gradual stabilization in India's $315 billion IT services sector, which has been experiencing a prolonged slowdown in client spending. The performance of larger peers, such as Tata Consultancy Services and HCLTech, also saw a strong rise in shares after the release of their results, as investors become more optimistic about improving demand and AI-related spending.

Jefferies noted that revenue and margins surpassed expectations, highlighting management's comments about two delayed large deals expected to close this quarter, which would help enhance the growth outlook. Similarly, Dolat Capital emphasized stable revenue performance and improving profitability, adding that better deal conversions could boost growth in the second half of the fiscal year.

Emkay Global pointed to a robust pipeline and the anticipated closure of delayed deals, suggesting stronger revenue momentum in future quarters. Wipro shares have declined by nearly 32% this year, as opposed to a 17% decrease in the IT index.