Wipro hits 52-week high; buyback attractively priced, say analysts

Shares of Wipro, country's third largest software services firm, hit a 52-week high of Rs 291 on Friday, up over 8% after the IT major announced a share buyback of Rs 11,000 crore entailing 34.3 crore equity shares at Rs 320 apiece. The buyback price is 24% higher than the average price of the stock for the past six months, which analysts believe is attractive and investors can consider tendering their shares. “The proposed buyback has been done at an attractive price. It will see the stock rally in the immediate term. I think investors can tender their shares,” said Sarabjit Kour Nangra, VP Research- IT at Angel Broking. Commodity Trading Tips

 
Brokerage HDFC Securities also suggests investors tender their shares. Going ahead, the brokerage feels organic growth for the company will remain a challenge and investors will be better off utilising the current opportunity to exit the stock . “Organic growth engine for Wipro remains a challenge. Some pockets have shown improvement in the last couple of quarters. Digital revenue is growing strongly, but these are not enough to backfill the loss from legacy.  We currently have a neutral rating on the stock, and we recommend shareholders to tender shares,” point out Amit Chandra and Apurva Prasad of HDFC Securities in a result analysis note. Meanwhile, Wipro has gained over 13% year-to-date, the most among four largest IT services firms. TCS and HCL Tech rose 3% and 7%, respectively, while Infosys declined 4% during the same period. By comparison, the Nifty IT and the Nifty50 indices have gained 0.9% and 21%, respectively during this period. Nifty Trading Tips