Shares of Indian IT major Wipro Ltd have experienced a significant downturn, falling 55% from their peak of Rs 369.93, recorded on October 14, 2021. This substantial decline has resulted in negative returns for investors over periods as long as five years, with the stock recently touching a 52-week low of Rs 163.35.
Wipro Stock Performance and Analyst Views
The IT giant's stock is currently trading below all major moving averages—5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day—indicating a strong bearish trend. Wipro's market capitalization has shrunk to Rs 1.63 lakh crore. Despite the current slump, some analysts project a potential for 82% positive returns over a ten-year span.
Kunal Kamble, Sr. Technical Research Analyst at Bonanza Portfolio, noted that Wipro remains in a clear downtrend with persistent lower highs and lower lows. He advised against fresh buying and suggested existing positions be exited below Rs 164, anticipating further downside. Jigar Patel from Anand Rathi identified support at Rs 160 and resistance at Rs 171, with a decisive breakout above Rs 171 potentially leading to Rs 175.
Broader Market Factors Impacting IT Sector
The broader Indian IT sector, including Wipro, faces significant headwinds from a tightening US monetary policy. The US Federal Reserve's rate hikes, including a recent 25 basis point increase, often lead to elevated borrowing costs for clients. This prompts companies to defer or scale back technology investments, directly impacting revenue growth for Indian IT firms heavily reliant on overseas clients.
Additional Pressures on Indian IT Companies
Beyond interest rates, the sector grapples with concerns over US trade tariffs, the disruptive potential of artificial intelligence (AI), and geopolitical tensions. Given that the US market accounts for over half the revenue for many major Indian IT companies, these external factors significantly influence earnings outlooks and investor sentiment, contributing to the prolonged pressure on stocks like Wipro.