Neutral Wipro; target of Rs 290: Motilal Oswal

Motilal Oswal's research report on Wipro

Wipro (WPRO) reported 3QFY25 IT Services revenue of USD2.6b (0.1% QoQ) in constant currency (CC), above our estimate of a 1.0% QoQ decline. It posted an order intake of USD3.5b (down 1.3% QoQ), with a large deal TCV of USD0.96b (down 35% QoQ). EBIT margin of IT Services was 17.5% (est. 16.4%). EBITDA rose 4.0% QoQ/12.5% YoY to INR47b (est. INR45b). PAT stood at INR33.6b (+4.7% QoQ/+24.7% YoY), above our est. of INR30b. For 9MFY25, revenue declined 1.4%, whereas EBIT/PAT grew 11.4%/16.7% vs. 9MFY24. We expect revenues/EBIT/PAT to grow by 1.0%/11.1%/11.2% YoY in 4QFY25. We reiterate our Neutral rating as we view the current valuation as fair. Our TP of INR290 implies 22x FY27E EPS.

Outlook

We have raised our FY25E EPS by ~5% to factor in the margin beat and kept FY26E/FY27E EPS broadly unchanged after its 3Q print. We reiterate our Neutral rating as we view the current valuation as fair. Our TP of INR290 impliearstoes 22x FY27E EPS.ear