Hold Wipro; target of Rs 420: Sharekhan

Sharekhan's research report on Wipro

For Q2FY23, Wipro reported an improvement with qoq revenue growth of 4.1% in c/c although the reported revenue and EBIT margin numbers were slightly below our estimates. Sequential Improvement in EBIT margins at 15.1% was aided by pricing, productivity and rupee depreciation, which was partially offset by wage revision effective from September. Healthy signing of large deals in Q2 with Large deal TCV at US$725 mn after an exceptional Q1FY23 when it had clocked TCV of $1.1 billion translating into 42% y-oy growth in large deal bookings for H1FY23.Attrition stood at 23%, a moderation of 30 bps from the previous quarter. For the December quarter management has guided for a sequential revenue growth of 0.5% to 2.0% indicating factoring of seasonality and some caution due to uncertainty unfolded by the current macro environment.

Outlook

We maintain a Hold on Wipro with a revised PT of Rs. 420, given the muted sequential guidance amid uncertainty prevailing on account of macro overhang.