Hold Wipro; target of Rs 500: ICICI Direct

ICICI Direct's research report onWipro

Wipro reported a strong quarter with IT services US$ revenue growth at 2.7% to US$1955 million. Growth was supported by full quarter consolidation of Appirio (contributing 1.5% to revenues). Further, growth was led by manufacturing & technology (up 5.3% QoQ), finance solutions (4.4% QoQ) and energy & utilities (3.4% QoQ) among verticals.

Outlook

We expect Wipro to report slower rupee revenue CAGR of 2.9% in FY17-19E with average EBIT margins at 16.5%. We have rolled over our valuation to FY19E. We maintain our HOLD recommendation on the stock with a revised target price of Rs 500/share (13.5x FY19E).

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