Neutral Wipro; target of Rs 450: Motilal Oswal

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Motilal Oswal's research report on Wipro

Wipro (WPRO) reported better-than-expected revenue growth of 3.4% QoQ CC, on the higher end of the guidance band (1.5–3% QoQ CC). Growth was broad-based across verticals, with five of seven verticals showing good QoQ growth. WPRO’s continued margin improvement (+250bp QoQ / +330bp YoY) and strong cash generation (FCF/PAT at 133%) were the key positives in 3Q. In 9MFY21, IT Services reported revenue (USD)/EBIT/PAT of -3.2%/10.2%/6.9%. Wipro reported 12 deal closures and deal TCV of USD1.2b in 3Q, including USD700m from Metro AG. It further guided for USD CC revenue growth of +1.5–3.5% QoQ in 4QFY21, with the mid-point in line with our expectation.

Outlook

Maintain Neutral – as we await a) further evidence of execution of Wipro’s refreshed strategy and b) successful turnaround from its growth struggles over the last decade before turning more constructive on the stock. Our TP implies 19x FY23E EPS.

For all recommendations report, click here

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