Wipro pips HCL Tech in m-cap to become third most-valued Indian IT firm

IT major Wipro, on Friday, regained the position as India's third most-valued information technology (IT) company, surpassing HCL Technologies in terms of market capitalisation (market-cap).

At 09:37 am, Wipro stood at number 12 in the overall m-cap ranking with an m-cap of Rs 2.65 trillion. HCL Technologies, meanwhile, slipped to number 13 with an m-cap of Rs 2.62 trillion, BSE data shows. Wipro has regained this spot after a gap of 18 months. Earlier, on October 22, 2019, Wipro had a market-cap of Rs 1.449 trillion while HCL Technologies had a market-cap of Rs 1.444 trillion.

Tata Consultancy Services (TCS), which is at number one position in IT companies market-cap rank, stands strong with a market-cap of Rs 11.47 trillion, followed by Infosys (Rs 5.72 trillion), data shows.

Shares of Wipro hit a record high of Rs 494.50 on Thursday, ralling 16 per cent in the past five trading days, after the company reported a healthy IT services revenue growth and margins in the March quarter (Q4FY21). In comparison, HCL Technologies were down 2 per cent during the same period. The stock had hit an all-time high of Rs 1,073.55 on January 13. The company is scheduled to announce its Q4FY21 results today.

After a muted growth over the last few years, Wipro delivered strong results for a third quarter in a row led by a healthy volume growth. After a steep decline in Q1FY21, the company bounced back sharply.

"Wipro's turnaround has been led by the strategy of the new CEO, coupled with a strong demand environment. Along with these, improved execution is likely to drive earnings going ahead," analysts at Edelweiss Securities said. All in all, the brokerage firm remains optimistic about the demand environment and maintains ‘BUY’ on the stock with an unchanged target price of Rs 550.

ICICI Securities, on the other hand, said that the key highlights of the quarter were healthy deal wins, up 16.7 per cent quarter on quarter (QoQ), to $1.4 billion, healthy net addition of 7,404 employees, and higher offshore up 180 bps to 54.5 per cent. "Robust Q1FY22E guidance IT services revenues would be in the range of $2,195 - 2,238 million, which translates into 2.0-4.0 per cent QoQ growth. The guidance does not include announced acquisitions of Capco and Ampion," it said.

The brokerage firm believes Wipro possesses all the key ingredients of robust growth in the long run. "In addition, improved deal wins, higher demand in Europe, client mining, acquisition of new logos and traction in digital revenues bode well for revenue growth. Hence, we are positive on the stock from a long term perspective," it said in a note.