India's Wipro shares fall over 6% as quarterly profit, outlook disappoint

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FILE PHOTO: The Wipro campus is seen in Bangalore

BENGALURU (Reuters) -Shares of Wipro Ltd fell as much as 6.3% on Thursday, a day after the Indian IT services provider reported subdued growth in quarterly profit while larger peers posted strong results amid upbeat demand outlook.

Wipro posted on Wednesday a 30% rise in December-quarter revenue but flat net profit growth, while Infosys raised its revenue forecast and Tata Consultancy Services predicted robust demand, saying they expect tech spending to continue, particularly for digital services.

Wipro said it closed 11 large deals with a total contract value of more than $600 million in the third quarter, but analysts at Ambit capital termed the wins "tepid," saying the total value was largely unchanged from the previous quarter.

Bengaluru-based Wipro forecast March-quarter revenue from the IT services segment to be in a range of $2,692 million to $2,745 million, compared with $2,639.7 million in the December quarter. The company also said its pipeline showed healthy mix of large and mid-sized deals.

"Given the strong performance by Wipro over the last few quarters, along with positive demand commentary from the management, the guidance was underwhelming and would act as a drag on near-term share price performance," Motilal Oswal said in a note.

India's software services sector has won more business during the COVID-19 pandemic as companies globally look to boost their digital presence and demand IT services ranging from cloud-computing, digital payment infrastructure to cybersecurity.

Shares of Wipro have declined 9.2% so far this year after a more than 85% surge in 2021. Last year, larger peers Infosys and TCS gained over 50% and 31%, respectively.

(Reporting by Nallur Sethuraman in Bengaluru; Editing by Subhranshu Sahu)

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