Shares of Wipro gained nearly 2% in opening trade on Friday after the IT major bagged a multi-year contract to deliver service integration and management services to the U.K. government treasury. The IT heavyweight has risen nearly 9% in the past one month after hitting a 52-week low of ₹391 on July 15, 2022. In comparision, the BSE benchmark Sensex has surged 10% over a month period.
Boosted by the deal with the U.K. government treasury, Wipro share price opened higher at ₹439.90, against the previous closing price of ₹435 on the Bombay Stock Exchange (BSE). Post opening, the IT stock rose as much as 1.7% to hit an intraday high of ₹442.55 apiece, while market capitalisation climbed to around ₹2,41,644 crore.
As per the Bengaluru-headquartered software firm, the service will enable seamless integration of IT services across multi-functional suppliers and partners, enhancing the user experience across HM Treasury (HMT) and its arm’s length bodies. HMT is the U.K. government's economic and finance ministry, responsible for developing and executing the government's public finance policy and economic policy.
Wipro and HMT will collaborate to enable end-to-end Service Integration and Management (SIAM) services, from strategy, design, and implementation to running business-as-usual services such as day-to-day coordination of service integration across HMT’s vendors. “Wipro’s robust SIAM capabilities and proven approach will complement HMT’s vision to build a sustainable and continuously improving supplier ecosystem and infrastructure,” the IT major said in an exchange filing on August 18.
“I am looking forward to working with Wipro in shaping and delivering the next generation of IT services at HM Treasury. This new partnership will support the department by improving end-to-end IT services by delivering more responsive services for our users,” says Huw Stephens, Chief Information Officer, HM Treasury.
Omkar Nisal, Manager Director UK & Ireland, Wipro, says the partnership with HMT will play a key role to drive their ‘One Team’ culture. “The Wipro team will be acting as an orchestrator; managing and governing end-to-end service operations across all of HMT’s suppliers; delivering operational efficiency, transparency and improved service quality.”
“Public Sector digitalisation is vital to providing efficient and resilient services to citizens across the UK, so it’s an honour to play an important role in a prestigious government department at the beating heart of the U.K. economy,” Nisal adds.
Wipro shares have given a negative return of 29% in the last one year, while it has fallen 39% in the calendar year 2022. The largecap stock, however, regained some ground in the last one month, with share price rising nearly 9%.
Domestic brokerage ICICI Direct recommended a “Hold” call on Wipro stock after it released its June quarter earnings last month. The agency has given a target price of ₹460 for one year horizon. Post Q1, JM Financial pegged a target price of ₹470, while HDFC Securities and YES Securities see the stock at ₹475 and ₹482, respectively.
For the April-June quarter of 2022, Wipro reported a 21% decline in its consolidated net profit at ₹2,564 crore for the first quarter of FY23, compared with ₹3,232 crore in the corresponding quarter of last fiscal. Its revenue grew to ₹21,529 crore from ₹18,252 crore in Q1 FY22. However, the rise in revenue was offset by increasing costs, which soared to ₹15,560 crore from ₹12,757 crore during this period.
In Q1 FY23, Wipro added 164 new customers, taking the total number of active customers to 1,433 as of June 30, 2022. The number of customers in the above $100 million bracket increased to 20 from 19 in the previous quarter and 13 in the same quarter last fiscal. The company reported 20 customers in the above $75 million bracket, rising from 29 in Q4 FY22, and 27 in Q1 FY22.