Hold Wipro; target of Rs 500: KR Choksey

KR Choksey recommended hold rating on Wipro with a target price of Rs 500 in its research report dated January 18, 2024.

Broker Research

January 19, 2024 / 08:52 IST

hold

KR Choksey's research report on Wipro

For Q3FY24, Wipro reported revenue of INR 2,22,051 Mn, a decline of 4.4% YoY/ 1.4% QoQ. Revenue for 9MFY24 grew by 0.4% YoY to INR 6,75,520 Mn. The revenue decline was due to weakness in manufacturing, technology, consumer and communication verticals. EBIT came in at INR 32,865 Mn, a decline of 12.7% YoY and 1.4% QoQ. EBIT margin of 14.8% fell by 140 bps YoY and 1 bps QoQ due to the impact of low revenue and added costs from wage hikes and furloughs. For 9MFY24, EBIT contracted by a marginal 0.2% YoY while EBIT margin declined by 9 bps YoY. PAT for the quarter declined by 11.7% YoY and increased by 1.8% QoQ to INR 26,942 Mn. For 9MFY24, PAT/PAT margin declined by 0.2% YoY/ 7 bps. The Company announced an interim dividend of INR 1 per equity share. The payment will be made on or before 10th February 2024.

Outlook

We expect that the size of the TCV and focus on AI products should help Wipro demonstrate healthy long-term growth. However, we believe that at current levels, much of the growth and margin potential for the stock appears to be priced in. Given these factors, we maintain our “HOLD” rating on the stock.

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