The third largest IT company in the country posted dismal Q4 figures after its profit margins came under pressure.
Shares of IT major Wipro tumbled almost 7% after the company's March quarter earnings missed street expectations.
After a weak opening, the stock further plunged 6.87% to Rs 560 on BSE. At NSE, it tanked 6.92% to Rs 559.60.
The bluechip was the top loser among the frontline scrips on both Sensex and Nifty during the morning trade.
"Wipro's March quarter results have missed expectations both on growth and margins," Emkay Global Financial Services said in a report.
Wipro, India's third-largest IT firm, reported 1.6% drop in March quarter profit to Rs 2,235 crore due to pressure on margins even as it aims to double revenue to $15 billion by 2020, while its board approved a Rs 2,500-crore share buyback plan.
The Azim Premji-led firm had registered a consolidated net profit of Rs 2,272 crore in the same quarter last fiscal. IT services, which account for a lion's share of its turnover, saw margins drop by 10 basis points to 20.1% as compared to October-December quarter and by two percentage points on year-on-year basis and were also impacted by weakness in its financial and healthcare services business.
The company board also approved a share buyback for Rs 2,500 crore. Wipro will buy up to 4 crore shares, representing 1.62% of the total paid-up capital, at Rs 625 apiece. The company is looking to double its turnover to $15 billion by 2020 as it focuses more on digital and automation under the new management team.
It closed 2015-16 fiscal with about $7.7 billion in annual revenues. During January-March quarter, Wipro's revenue rose 12.9% to Rs 13,741.7 crore.
Kotak Securities Senior Vice-President and Head of Private Client Group Research Dipen Shah said the revenues matched up with expectations but margins were below our expectations. "Client specific challenges in BFSI impacted growth while energy vertical continued to witness headwinds. The revenue guidance for Q1 indicates marginal growth on an organic basis, which is disappointing," he added.
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