India's Wipro shares slump 11% on weak forecast

Apr 22, 2013

Shares of Wipro, India's third-largest software firm, slumped as much as 11 percent intraday Monday after it projected weak revenue growth last week owing to global uncertainty.

The Bangalore-based firm's shares fell 11.02 percent to a low of 328.0 rupees, a near nine-month-low, on the .

The stock, which did not trade on Friday due to a public holiday, closed down 7.95 percent at 339.35 rupees.

Wipro on Friday reported a 16.7 percent year-on-year rise in consolidated to 17.29 billion rupees ($318 million) in the January to March quarter.

It also forecast revenue of $1.57 billion to $1.61 billion from IT services in the next quarter ending June, which suggested relatively flat growth amid tough business conditions.

"The has disappointed the markets. The stock is also being re-rated as a standalone IT firm, after the demerger of its businesses," Jagannadham Thunuguntla, SMC Global Securities chief strategist, told AFP.

Wipro this month demerged its non-technology operations—including consumer care, lighting, furniture, infrastructure and medical businesses—into a separate, unlisted firm called Wipro Enterprises.

Wipro's future earnings data, starting the April-June quarter, will be as a standalone IT firm.

Earlier in the month, rival Infosys also projected below-expected revenues, citing "global challenges".

TCS, Infosys and Wipro lead India's flagship IT outsourcing industry, which carries out a wide range of jobs for Western firms such as answering calls from bank customers, processing and software development.

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