Reduce Wipro; target of Rs 550: Dolat Capital

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26 Aug, 2025 12:21

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Dolat Capital`s research report on Wipro“We continue to maintain our sector underperformer call on Wipro owing to its sustained underperformance in CY14 and discouraging outlook on quarterly revenue guidance, weak employee growth (2% on LTM basis) and miss from its long held aspiration of growing inline with peers/industry which still seems tough target to achieve (TCS/Tech M indicating 16%+ growth). We believe sporadic nature of its growth lacks the confidence of a strong recovery in near term and does not see it getting its growth aligned with peers/industry in FY15 even after accounting ATCO deal and thus we maintain our underperformer rating given few drivers of growth in its portfolio. We recommend Reduce on the stock with a TP of INR 550 valued at 15x FY16E earnings.” “The results are slightly below our estimates with a 1.8% QQ growth in IT services (3% in the constant terms). The growth in the quarter has been broadened across the verticals (Energy, Manu & Hi tech, Healthcare) and geos (US, APAC, India) but still not shown consistency in various parts of its portfolio. It has bagged its largest deal ever through inorganic route (invested $195mn) which would contribute about $112mn+ run rate annually on a total outsourcing deal from ATCO and has also been gaining on other key account mining but is still seeing weaker traction compared for peers overall. It is confident to raise the tempo based on strong deal rampup and improved discretionary spend trends; however, the weak guidance of 2-4% for Q3 does not highlights any meaningful recovery and thus would wait for more signals before subscribing the management commentary.” “We continue to maintain our sector underperformer call on Wipro owing to its sustained below par performance despite its three long years efforts on the strategic revival. We largely maintain our estimates and have built in 9/8% Revenue/EBIT CAGR over FY14-17E. We recommend Reduce rating on the stock, with a TP of ` 550 valued at 15x of its FY16E earnings,” says Dolat Capital research report. 

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