Wipro sees a breakout, outperforms on buzz of change in leadership

Mumbai: Shares of Wipro surged to their highest level in more than 18 months on Tuesday, outperforming peers, amid market speculation that the company is considering a change of leadership. The software services major said, in a statement, it "categorically and unequivocally denies all such rumours".

Shares of the software major ended 1.61% higher at ₹470.10 on the NSE. Benchmarks Nifty 50 and Sensex ended 0.3-0.4% higher, while the Nifty IT index ended 0.4% in the red. Analysts do not rule out the likelihood of the stock gaining another 10% from current levels.

Market talk of Wipro looking to bring in a new chief has propped up the stock price of late, helping it break out of its consolidation phase, and gain nearly 9% in three sessions.


"The stock, after a long time, has strengthened the trend with a clear breakout above the ascending channel pattern on the daily chart at ₹455 zone to anticipate further rise in the coming days," said Shiju Koothupalakkal, analyst at Prabhudas Lilladher. The shares have moved past their 50-day, 100-day and 200-day moving averages.

On technical charts, the shares have given a breakout around the ₹455 levels, signaling further gains in the near-term, said analysts.

"If the stock can sustain around ₹440-445, we can see this rally extend to up to ₹490-520 in the short-term," said Rajesh Palviya, head of technical research at Axis Securities. Investors can buy and accumulate the shares with a stop loss of ₹430, he added.

Shares of Wipro have outperformed its peers Tata Consultancy Services, Infosys, HCL Technologies, Tech Mahindra, and LTIMindtree over one-week and one-month periods.

Its performance in 2023, though, has been among the bottom three, and the worst over three years among the constituents of the Nifty IT index.

The market chatter of a change in leadership at Wipro has surfaced amid a spate of senior exits at the firm. Motilal Oswal Financial Services said in a report on December 11 that Wipro's business performance has been lackluster over the last six quarters, following a robust FY22, after Thierry Delaporte assumed the role of CEO in July 2020.

"The demand softness in key verticals (BFSI and consumer) and high exposure to discretionary consulting vertical (especially Capco) have weighed on Wipro's operational performance, despite significant internal changes to improve decision making and refresh business leadership," the brokerage said.

nikita.periwal @timesgroup.com