The Wipro share gained almost 18 percent on Wednesday. This was the largest daily profit since May 2004, a day after the Bengaluru-based IT major reported a better-than-expected net profit from April to June. At 10:47 a.m., Wipro shares were 15.75 percent higher at 260.50 rupees each on the BSE, significantly outperforming the Sensex reference index, which rose 1.82 percent. Wipro used to go up 17.71 percent to rupees 264.90 during the session.
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Wipro started the day up 5.31 percent at 237 rupees compared to the previous closing price of 225.05 rupees and remained the best percentage gain in the Nifty basket of 50 stocks.
The share led to strong growth in the IT package. The Nifty IT index – consisting of technology stocks – rose by up to 4.10 percent to the higher intraday value since February 26.
After the market times on Tuesday, the company had reported a net profit of rupees 2,390.20 billion for the quarter ending June 30, exceeding analysts’ expectations.
Wipro’s revenue in the first quarter of the current fiscal year was 14,913.10 billion rupees, a decrease of 5.08 percent from the previous quarter.
Wipro said the conditions caused by the coronavirus pandemic could adversely affect future sales, operating income, and overall financial performance.
“Our business operations may also be adversely affected by a number of external factors related to the COVID 19 pandemic that we have no control over,” Wipro said in a statement.
The company announced that IT services revenue for the quarter ended June 30 was 14,595.60 billion rupees, a decrease of 4.58 percent from the previous quarter.
Adjusted for currency effects, Wipro announced that sales in the IT services segment declined by 4.4 percent year-on-year.
The operating margin – a key measure of profitability – in the IT Services segment improved to 19.0 percent in the June quarter compared to 17.6 percent in the period from January to March.
“We expanded margins in the quarter despite lower sales due to the solid execution of several operational improvements and the devaluation of the rupee,” said CFO Jatin Dalal.