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,
531219,
surged again, toward a 13-month high, a day after breaking a streak of disappointing earnings reports.
Wipro’s U.S.-listed stock
WIT,
507685,
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 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%.
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