Wipro Limited is an Indian multinational corporation that provides information technology, consulting and business process services. Wipro’s capabilities range across cloud computing, cyber security, digital transformation, artificial intelligence, robotics, data analytics, and other technology consulting services to customers in 167 countries. It is the 4th largest Indian company in the global IT services industry behind TCS, Infosys and HCL Technologies.
The stock price of IT giant Wipro has fallen down by 54%, marking the company as the top loser amongst the IT giants this year. Wipro stock hit its 52-week low of Rs 372.40 on 17th October 17, 2022.
As of 16 December 2022, Wipro stock price which opened at Rs 718 on January 1, 2022 is currently at Rs 390. On the contrary, Infosys stock price has lost 19% and TCS stock price has lost a mere 13% in 2022. However, Sensex has risen by 5.19% or 3,027 points and Nifty has also risen by 5.07% or 882 points.
The Nifty IT index has opposed the rally in benchmark indices and corrected 25.09% or 10,050 points in 2022.
Analysts from major financial firms have considered the fall in IT stocks specifically in Wipro due to the ongoing Russia-Ukraine war, the economic slowdown and the Covid-19 lockdowns across the globe, which impacted the international business of the Indian IT firms during the period.
The stock has delivered poor growth in net profit for the current year of 2022. However, if we look at the bright side, the Sales from Operations have a consistent growth since December 2020.
We must remember that fear and uncertainty should not affect our views on the IT stocks. The major IT firms are trading at a discount especially Wipro and accumulating shares of Wipro will definitely be a boon in the future as growth is cyclical. A few bad quarters must not imply that the stock is bad. Yes, the conditions right now are unfavourable for the IT firms, but bad times do not last forever, and to invest into IT stocks when they are at their lowest is a golden opportunity. We shall see growth in the future as technology has and will drive humanity to new highs.
If we look at the retracement levels from the crash of 2020 to the high of 2021, Wipro price is taking heavy support on the 61.8% retracement level. The stock has been hovering in the zone of Rs 380 to Rs 420 in the past months. The stock price is below the 200-day exponential moving average which indicates that the stock is oversold. MFI is currently at 37 points and has been close to 30 points for the current year. This indicates that the stock is still hugely oversold.
All we need is favourability in the IT industry which will drive growth. We have a very good opportunity to accumulate the shares of the IT giant Wipro. We shall wait until the operators become bullish once the company starts posting positive and consistent growth in net profit. Wipro stock price is certainly at a discount and oversold, accumulation of this stock will give you incredible returns in the long-term prospect.