Accumulate Wipro; target of Rs 310: Prabhudas Lilladher

Accumulate

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

The operating performance witnessed notable improvement in 3Q, the intensity of decline within certain pockets has receded despite having furloughs impact during the quarter. The gaining operational strength is attributed to the internal measures coupled with improving spending sentiment on the discretionary areas. The spending environment looks promising in BFSI and Healthcare, especially in the Americas region, while other verticals and geographies are progressing to achieve a steady state. The consulting units (Capco and Rizing) are consistently supporting the topline growth, even the order book for Capco (up 9% YOY) looks attractive in 3Q. Although the large deal TCV saw a mild improvement (+6% YoY), the deal tenure has reduced to some extent, translating to better ACV. The deal pipeline is still heavily concentrated on the vendor consolidation and cost-takeout programs, while discretionary programs restricted to BFS in 3Q. The consistent recovery is visible in the company’s performance, while we believe the progress in other verticals and geographies would majorly be a function of macro recovery. We are aligning our revenue estimates to Q3 beat and baking in 1.9% YoY CC decline in FY25E (-2.5% earlier), while estimating +4.4%/+8.3% CC YoY in FY26E/FY27E. The execution on operating margin was strong, despite 2-month compensation due in Q3. The management is confident of maintaining margins at a narrow band of 17.5% while flexing FPP and pyramid optimization levers. We are re-aligning FY25E IT Service margins to Q3 beat at 16.9% (16.5% earlier), while projecting FY26E/FY27E margins at 17.4%/17.8%, which gets supported by growth acceleration and the continued optimization exercise. We believe, all positives are factored into the valuation, maintain “ACCUMULATE” rating.

We estimate USD revenues/earnings CAGR of 2.7%/11% over FY24-FY27E. The stock is currently trading at 20x FY27E. We are assigning P/E of 22x to FY27E with a target price of Rs 310. We maintain “ACCUMUALTE” rating.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.