Hold Wipro; target of Rs 325: Sharekhan

Sharekhan's research report on Wipro

Wipro reported IT service revenues of $2629.1 million, up 0.1% q-o-q/ down 0.7% y-o-y in constant currency terms, beating our estimates of decline of 0.4% q-o-q in CC. IT services’ EBIT margins rose by ~70 bps q-o-q to 17.5% beating our estimates of 16.8%. Large deal TCVs stood at $961 million, down 36% q-o-q/up 7% y-o-y. The company provided revenue growth guidance for IT services of -1% to 1% in CC terms for Q4FY25. The payout policy has been revised to at least 70% of net income cumulatively over a three-year period, effective FY26.

Outlook

We upgrade to Hold with a revised (PT) of Rs.325 (valuing at 22x FY27E EPS). At CMP, the stock trades at 24.3/23.1/20.4x its FY25/26/27E EPS.