Reduce Wipro; target of Rs 280: Emkay Global Financial

Emkay Global Financial recommended reduce rating on Wipro with a target price of Rs 280 in its research report dated July 18, 2025.

Broker Research

July 18, 2025 / 12:14 IST

Reduce

26 Aug, 2025 12:21

Volume

Todays L/H

Emkay Global Financial' research report on Wipro

Wipro reported steady operating performance in Q1, though one-off restructuring costs led to a miss on reported EBITM. IT Services revenue declined 0.3% QoQ to USD2.59bn (down 2% CC), in line with our expectations. Overall EBITM declined by 120bps QoQ due to one-off restructuring costs of ~Rs2.5bn in Europe, missing our estimates, while EBITM for IT Services matched our expectations. Deal intake remained strong at ~USD5bn in Q1 (includes large-deal bookings worth ~USD2.7bn), with book-to-bill of 1.9x. The management gave revenue growth guidance of -1% to 1% CC QoQ in Q2, in line with our estimates. While macro and geopolitical uncertainty remains elevated, the management is confident of growth acceleration in H2 on the back of strong deal intake, robust deal pipeline, and improved execution rigor. The management indicated pressure on margins in the near term due to anticipated ramp up of competitively-priced large deals and initial investments in such deals, although it refrained from quantifying the overall impact. We prefer to wait for clarity on the margin trajectory before taking a more constructive view.

Outlook

We trim FY26-28E EPS by ~1%, factoring in the Q1 performance; retain REDUCE with TP of Rs280 at 20x Jun-27E EPS.

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