Reduce Wipro; target of Rs 335: Dolat Capital

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26 Aug, 2025 12:21

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Dolat Capital is bearish on Wipro and has recommended reduce rating on the stock with a target of Rs 335 in its April 22, 2013 research report.
 
“Wipro, results are slightly below estimates with concentrated growth. Q1FY14 Guidance is disappointing at negative to 1.5 percent growth. Wipro has been repeatedly claiming of improvement in efficiency and focused strategy on booming technology areas but has been slowest growing company in our coverage group. About 50 percent of revenues (BFS, Telecom and Retail) segment are down on their revenue run rate on YY basis. It has also guided muted for Q1 raising further question on any recovery in near term.”
 
“The Company has indicated flattish sequential movement in its deal pipeline during the quarter. The current funnel size is almost at par with Q4FY12 which indicates no major business buildup to mark any significant growth in FY14. It is largely focusing on client farming (75 percent weight age) over client hunting through increased investments and widening relationship status with the client. However; benefits are restricted to Top 10 whereas rest portfolio is flat at best. Its employee count has increased by about 5 percent despite stagnating volumes (up mere 1 percent YoY basis) resulting in over 400bps decline in utilization. We believe the OPM gains (80bps) have been largely supported by realization/fx gains and thus stand at risk in case of adverse movement.”
 
“We see no major upside till it starts delivering the performance inline with its claimed commentary. We maintain our underperformer rating with a Target price to ` 335, valued at 12x of its FY15E earnings in view of risk on further earning dilution (upto 4 percent dilution) if investor prefers trade-off of Wipro Enterprise share (divested business) share with that of Wipro (ratio 5:1),” says Dolat Capital research report.

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