BENGALURU: Shares of Wipro dropped to a three-month low and weighed on other Indian IT companies on Thursday after the country’s fourth-largest IT services provider forecast the slide in IT services revenue would get worse this quarter.
Shares of Wipro, which also posted an unexpected drop in revenue in the July-September quarter, fell as much as 4.3 per cent in their steepest intraday percentage decline since mid-April. The Nifty IT index dropped 0.5 per cent.
While the IT sector has been contending with soft demand for the past few quarters, leading to the likes of Infosys cutting its full-year forecast, analysts believe Wipro’s higher exposure to consulting hurt it more than its peers.
“Given Wipro’s broader presence in the discretionary areas, the conversion is a challenge as enterprises are cautious and are reprioritising expenditures,” Motilal Oswal said in a note.
Wipro said it expects its IT services revenue, which is nearly all of its business, would drop 3.5 per cent to 1.5 per cent, on a constant currency basis, sequentially in the third quarter. That is steeper than the 0.5 per cent sequential drop in the second quarter.
The company’s shares were last down 3.3 per cent at 394 rupees, trimming their year-to-date gain to 0.3 per cent. In comparison, the Nifty IT index has risen nearly 10 per cent so far this year.
