Reduce Wipro; target of Rs 532: KR Choksey

KR Choksey recommended reduce rating on Wipro with a target price of Rs 532 in its research report dated October 21, 2024.

Broker Research

October 21, 2024 / 12:34 IST

Reduce-3

26 Aug, 2025 12:21

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KR Choksey's research report on Wipro

Revenue for Q2FY25 stood at INR 223,016 Mn, down 1.0% YoY (+1.5% QoQ), in line with our projections. EBIT grew to INR 36,725 Mn, up 19.4% YoY (1.3% QoQ), in line with our estimates. EBIT margin stood at 16.5%, up 281bps (-4bps QoQ). The YoY expansion in margin is attributable to reduced employee costs, subcontracting fees, and other expenses. PAT grew to INR 32,266 Mn, up 21.0% YoY (+6.3% QoQ), exceeding our expectations on account of higher than anticipated other income. PAT margin expanded 262bps YoY (+64bps QoQ) to 14.5%. We increase our FY26 EPS to INR 25.3 (previously: INR 24.8) and a P/E Multiple of 21.0x (previously: 20.0x), reflecting a better-than anticipated Q2FY25 result, large deal wins, and improving conditions for discretionary spending, to arrive at a Target Price of INR 532 (previously: INR 497). However, the recent rally in the stock price in the last six months (+23.2%), has resulted in, an inflated valuation for the IT firm. Moreover, we feel that WIPRO’s performance relative to other Tier-1 firms has lagged, wherein firms like HCL Tech and Infosys have raised their revenue guidance.

Outlook

Moreover, we do not see any signs of a sharp recovery in Wipro’s EPS that would justify the current elevated levels and reiterate our "REDUCE" rating on the shares of Wipro Ltd.

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