Wipro shares plunge 45% in 2022; here's what brokerages say

IT major Wipro's shares have fallen by 45%, making it one of the top losers among IT giants this year. The current session's stock of Wipro was trading at 396.40, which closed at Rs 715.20 on December 31, 2021. In 2022, Infosys stock lost 18% and TCS shares fell just 11.71%. In the same period, Sensex has gained 5.37% or 3,178 points and Nifty has added 5.28% or 930 points.

The BSE IT index fell 22.15% or 8,383 points this year, despite a major correction in the IT stocks. The index lost 16.60% or 5863 points during the last year.

The Nifty IT index defied the rally in benchmark indices and corrected 24.14% or 9,343 points in 2022. The index has declined by 18.43% or 6623 points in the last year.

On October 17th, 2022, Wipro stock hit its 52 week low of 372.40. It has recovered from its yearly low of 24 or 6.6%.

Analysts have attributed the fall in IT stocks especially Wipro to the ongoing Russia -- Ukraine war, the economic slowdown and Covid 19 lockdowns across the globe, which has impacted the international business of Indian IT firms during the period.

In the current trading session, Wipro shares were 1.66% lower at Rs 397 against the previous close of Rs 403.70. The IT stock has fallen for the last four sessions. In the last year, Wipro shares have declined 38.31%. Wipro's market cap fell to Rs 2.17 lakh crore on the BSE today.

A neutral rating on Wipro has been assigned by Nomura with a target of 425. The target price is 4% more than the market price of Rs 407 on December 2.

Nomura said on December 2 that we lower revenue growth forecasts for FY 24 -- 25 F; maintain Neutral for Wipro We lower our FY 24 -- 25 F USD revenue growth by 50 bps to FY 25 F from FY 24 F and hence our target price rises to Rs 425, set at an unchanged 17 x FY 25 F EPS of Rs 25. Wipro is currently trading at 16.3 x FY 25 FEPS. We prefer Infosys and we maintain Neutral on Wipro. Abhijeet from Tips 2 Trade said that strong sell-off in global IT stocks due to the inflationary environment has caused a recession in the global economy, leading to a sharp fall in Indian IT stocks including Wipro. The daily chart shows that Rs 406 is a strong resistance. The investors should wait for lower levels close to Rs 380 -- 385 to buy near term targets of 406 -- 416 in the coming days. In Q 2 of the current fiscal, Wipro reported a 9.27 per cent decline in net profit at Rs 2,659 crore compared to Rs 2,930. In the corresponding quarter last year, there were 70 crore.

Revenues for the quarter rose 14.60 per cent YoY to Rs 22,539. 70 crore came from Rs 19,667. In the same quarter last year, there were 40 crore. Revenues for IT Services were $2,797. 70 million were up 2.3 per cent from a year ago. Revenue growth in constant currency CC terms was 4.1 per cent.

Hem Securities has started coverage on Wipro with a buy rating based on its Q 2 earnings.

It has set a target of Rs 467, which is 15% higher than the current market price of Rs 406.

Hem Securities said in a December 7 report that Robust demand environment and healthy deal pipeline would drive Wipro's next growth. We believe the company will perform well over the next few quarters due to strong deal win momentum. The management's comment on supply side challenges, attrition rate and attrition rate are positive triggers in the stock. We initiated a BUY rating on the stock and value the stock at 15.4 times FY 24 E earnings to reach the target of Rs 467.