Wipro pips HCL Tech to be third largest IT firm by market capitalization

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MUMBAI : Mumbai: Wipro Ltd, on Friday, overtook Noida-headquartered HCL Technologies to become the third-largest Indian IT services company by market capitalisation .

Intraday, the market valuation of Wipro was at Rs2,64,916.48 crore while that of HCL Tech was at Rs2,62,004.37 crore on the BSE.

At 12.45 pm, shares of Wipro declined 0.60% to Rs483.70 on the BSE. In contrast, HCL Technologies gained 0.44% to 965.50, the stock had hit an all-time high of Rs1,073.55 on 13 January. the corporate is scheduled to announce its March quarter results later within the day.

Wipro has regained this spot after a niche of 18 months. Earlier, on 22 October 2019, Wipro had a market capitalisation of Rs1.449 trillion, while HCL Technologies had a market capitalisation of Rs1.444 trillion. market capitalisation of companies changes daily with the movement of their stock prices.

“Wipro’s strong revenue performance and better than expected margin performance and therefore the deal pipeline remains robust, and therefore the company won 12 large deals (including Telefonica) with a net-new total contract value (TCV) of $1.4 billion, with a complete TCV of $7.1 billion for 2HFY21, which is impressive and provides growth visibility,” analysts at HDFC Securities said. They maintain an “ADD” rating on the stock, as revenue growth of three .0% quarter-on-quarter (q-o-q), constant currency, was broad-based, and June quarter guidance of 2-4% q-o-q growth indicates a continuation of strong momentum.

TCS remains at the highest of the list of IT companies with a market capitalisation of Rs11.51 trillion, followed by Infosys with a market capitalisation of Rs5.73 trillion. Wipro ranks 12th in terms of overall market capitalisation , BSE data shows.

Motilal Oswal Financial Services said within the past few years, Wipro has underperformed tier-I companies on growth thanks to its higher exposure to challenged verticals like healthcare and energy, natural resources, utilities, and construction (ENU). “Changes at the corporate level have further constrained growth. However, the present restructuring and investments would take a toll on near-term margin, erosion at gains from operational efficiency. this could keep margin range-bound,” they said.

The brokerage lowered FY22E earnings per share by 6%, largely supported upcoming margin headwinds and earnings impact from the Capco acquisition, and therefore the estimate for FY23 largely remains unchanged, and features a “neutral” stance on the stock.

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