Motilal Oswal recommended Neutral rating on Wipro with a target price of Rs 257 in its research report dated July 15, 2020.
Motilal Oswal 's research report on Wipro
Wipro's ability to control costs and collections justifies the improvement in EBIT margin/cash conversion, despite the sharp drop in revenue. While full impact of the COVID-19 pandemic on pricing and Working Capital (WC) cycle is yet to play out, Wipro's outlook on managing margin stability (v/s Jun'20) and healthy cash conversions are impressive. In the current context, some of the verticals (Health BU) - earlier an overhang - should recover. Additionally, other factors in favor are playing out, such as (a) upside of a turnaround under a new CEO/strategy, and (b) possibility of large capital return. -We upgrade our FY21/FY22E EPS by 6%-12%, largely led by margin surprise. Before turning constructively positive on the stock, we await a refresh of the company's strategy and further evidence related to execution. Maintain Neutral.
Before turning constructively positive on the stock, we await a refresh of the company’s strategy and further evidence related to execution. Maintain Neutral.
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