Wipro share price hits fresh 52-week high ahead of Jul-Sep results; Infosys, L&T Infotech reach new highs

IT stocks continued to rally in today’s trade following a 5.3 per cent gain in the previous week. Ahead July-September earnings, Wipro share price hit a fresh 52-week high of Rs 379 apiece, rising 1.3 per cent. This week Infosys and HCL Technologies are also scheduled to announce their quarterly earnings on October 14 and October 16, 2020, respectively. Out of 10 Nifty IT index stocks, 9 scrips were trading with gains with L&T Infotech, Coforge and Infosys too at fresh 52-week highs. IT stocks outperformed the equity benchmarks last week where BSE Sensex and Nifty 50 gained 4.4 per cent. “We expect IT companies to report revenue growth recovery in Q2 driven by strong deal momentum and demand resiliency. Additionally, updates on medium-term margin trajectory and capital allocation policy would be key watch-outs,” Suyog Kulkarni, Senior Research Analyst at Reliance Securities, told Financial Express Online.

Wipro’s board will consider a buyback plan on October 13, which will be the fourth buyback by the IT bellwether in the last five years. This came following the TCS announcement of buyback of Rs 16,000 crore at Rs 3,000 per share and an interim dividend of Rs 12 per equity share. Kulkarni said Wipro is likely to remain in focus considering the proposed buyback announcement and update on medium-term action plan under new leadership. Last year, Wipro announced a Rs 10,500 crore share buyback at a price of Rs 325 per equity share, which was at over 15 per cent premium to stock price back then. Research and brokerage firm Nirmal Bang will watch out for discussion on the medium-term strategy of the new CEO of Wipro with possibly some financial goalposts, any top management restructuring driven by the new CEO.

The Nifty IT index was trading 1.35 per cent higher at 22,133 at the time of writing. “Sequential consolidated CC revenue growth expectations from Infosys/Wipro/HCL Tech are 2%/1%/3.5%,” Kulkarni added. From March lows of Rs 159.60, Wipro shares have rallied 137.46  per cent to hit a fresh high today. In the late morning deals, BSE Sensex was trading 148 points or 0.37 per cent up at 40,658, while the broader Nifty 50 index was off from crucial 12,000 and was trading flat at 11,938.