Sharekhan's research report on Wipro
For Q4FY22, Wipro’s OPM lagged our expectations, while revenue was in line with estimates. Net employee additions, client mining, logo additions and deal ACVs stayed strong, but attrition continued to inch up. The management guided for revenue growth of 1-3% q-o-q for Q1FY2023, below expectations of 2-4%. Record-high deal pipeline and strong net hiring indicate the strong underlying demand going ahead. Supply-side challenges, wage revision, rising discretionary expenses, and investments in frontline sales to weigh on its margins over next 2-3 quarters. Management guided EBIT margin to remain at 17-17.5% for FY2023.
We maintain a Hold on Wipro with a revised PT of Rs. 580, given robust ACVs, strong client mining and improved service portfolio due to capability-based acquisitions.
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