Reduce Wipro; target of Rs 500: ICICI Securities

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ICICI Securities research report on Wipro

Wipro’s (WPRO) 0.6% QoQ CC revenue was ahead of our and consensus estimates. BFSI-led growth was in line with the results announced so far in the sector, marking third consecutive quarter of BFSI vertical growth for WPRO. Q2FY25 saw good execution with 3/6 verticals showing positive QoQ growth, net headcount addition, 14.5% YoY large deal TCV uptick and 35bps QoQ margin expansion. However, WPRO faces the problem of all verticals/ segments not growing simultaneously in harmony and that still persists. There was continued weakness in manufacturing, energy & utilities. Europe is experiencing client-specific issues.

Outlook

Q3FY25 guidance at -2% to 0% QoQ CC is muted, pencilling in higher furloughs, contrary to what peers have indicated, partially due to Capco led additional furloughs. Maintain REDUCE with a revised TP of INR 500 (from INR 520 earlier) at 20x P/E on Q3FY26E- Q2FY27E EPS.

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Wipro - 18102024 - isc