Shares of Wipro Ltd. rocketed Friday, after the India-based information-technology consultant beat fiscal third-quarter profit expectations, to snap a streak of earning misses amid a jump in large deals, fueling hopes that a bottom in the IT business has been hit.
“In a seasonally soft quarter, deal booking momentum remained strong,” said Wipro Chief Executive Thierry Delaporte. “Our large deals recorded a 20-percent year-to-date growth.”
Meanwhile, shares of fellow IT consultant Infosys Ltd. INFY, +4.14% 531219, +4.60% surged again, toward a 13-month high, a day after breaking a streak of disappointing earnings reports.
Wipro’s U.S.-listed stock WIT, +16.95% 507685, +8.44% shot up 17% to $ 6.28, the highest close since May 17, 2022. The stock also posted its biggest one-day gain since it ran up 22.8% on Oct. 28, 2008.
Delaporte said he was “starting to see early signs” of a return to growth in IT consulting, as the Capco business the company acquired in 2021 experienced growth in order bookings in the double-digit percentage range.
Wipro’s stock enjoys its biggest gain in 16 years, as it heads for the highest close in nearly two years.
FactSet, MarketWatch
Wipro reported early Friday net income that fell to INR27.01 billion ($ 326 million), or INR5.15 a share, from INR30.65 billion, or INR5.56 a share, in the same period a year ago. That beat the FactSet consensus for earnings per share of INR5.10.
Revenue fell 4.4% to INR222.05 billion, ($ 2.7 billion), to beat the FactSet consensus of INR221.50 billion.
The company had missed EPS and revenue expectations in the past three quarters, and in six of the past seven quarters.
Infosys’ U.S.-listed shares rallied 4.1%, after jumping 4.0% the day before, toward their highest close since Dec. 5, 2022.
The stock had suffered its biggest one-day losses over the past three years on the days that the three previous earnings reports were released. It dove 6.5% on Oct. 12, 2023, sank 8.4% on July 20 and tumbled 9.8% on April 13.
On Thursday, the company reported fiscal third-quarter EPS that slipped to 18 cents from 19 cents, but was above the FactSet consensus of 17 cents. That also snapped a three-quarter streak of bottom-line misses.
Like Wipro, Infosys said results were boosted by “strong” wins in large deals.
Revenue inched up 0.1% to $ 4.66 billion, but came up shy of expectations of $ 4.71 billion, according to FactSet.
Wipro’s stock has rallied 29.2% over the past three months and Infosys shares have climbed 16%, while the iShares MSCI India ETF INDA has advanced 12.4% and the S&P 500 index SPX has gained 10.5%.