Hold Wipro: target of Rs 750: Sharekhan

Sharekhan's research report on Wipro

Q3FY22 revenue growth lagged our expectations, while IT services’ EBIT margin met our expectations. Net headcount additions, client mining and deal pipeline stayed strong, but attrition continued to inch up. The management guided for revenue growth of 2-4% q-o-q for Q4FY2022, as we expected, led by broad-based demand. Organic growth is estimated at a decent 1.4-3.4% q-o-q. Supply-side challenges, skill-based premium, amortisation expense of intangibles from recent acquisitions, increasing discretionary expenses, and investments in frontline sales to weigh on its margins in the near term. The management expects to maintain EBIT margin in a narrow band of 17-17.5% for FY2022.

Outlook

Though Wipro is progressing well in its turnaround journey, we believe a valuation of 23x FY2024E factors in the growth potential. Hence, we maintain a Hold on Wipro with an unchanged PT of Rs. 750.

More Info

At 17:30 Wipro was quoting at Rs 639.80, down Rs 10.05, or 1.55 percent.

It has touched an intraday high of Rs 649.80 and an intraday low of Rs 636.50.

It was trading with volumes of 979,629 shares, compared to its thirty day average of 575,312 shares, an increase of 70.28 percent.

In the previous trading session, the share closed down 6.00 percent or Rs 41.50 at Rs 649.85.

The share touched its 52-week high Rs 739.80 and 52-week low Rs 398.00 on 14 October, 2021 and 25 March, 2021, respectively.

Currently, it is trading 13.52 percent below its 52-week high and 60.75 percent above its 52-week low.

Market capitalisation stands at Rs 350,694.37 crore.

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