Buy Wipro; target of Rs 650: ICICIdirect

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26 Aug, 2025 12:21

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ICICIdirect.com's report on Wipro

"Wipro has guided for 1-3% revenue growth in Q4FY15E, which appears reasonable given it factors in potential project ramp-downs by energy and utility customers. The company highlighted that a significant fall in commodity prices could create near-term IT spending headwinds for these customers. However, in the longer term, it could create significant opportunities in cost optimisation deals. The overall demand environment commentary was optimistic across all verticals (excluding oil & gas) and geographies, including the US and Europe, and could help improve the growth trajectory going into FY16E. However, we would watch energy sector demand trends in Q4 before revisiting our growth estimates."

"We estimate Wipro will report revenue and EPS CAGR of 8% and 11% in FY14-16E (average 22.9% IT services EBIT margins in FY15-16E), vs. 14% each, reported in FY09-14 (average 21.9% margins), respectively, led by large deal ramp ups, client mining initiatives and pick-up in discretionary spending. We raise our target multiple (16.7x vs. 15.7x earlier) and price (Rs 650 vs. Rs 610) to account for improving outlook & maintain BUY rating", says ICICIdirect.com research report.

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