Buy Wipro; target of Rs 479: KR Choksey

KR Choksey is bullish on Wipro has recommended buy rating on the stock with a target price of Rs 479 in its research report dated April 27, 2023.

Broker Research

April 29, 2023 / 10:30 IST

Buy

KR Choksey's research report on Wipro

Wipro Ltd’s (WPRO) Q4FY23 performance was lower than our estimate. During the quarter, Gross Revenue reached INR 231.90 billion (USD 2.8 billion), with a sequential decline of 0.2% and an 11.2% YoY increase. IT Services Segment Revenue increased to USD 2,823.0 million, an increase of 0.7% QoQ and 3.7% YoY; while Non-GAAP constant currency IT Services segment revenue decreased 0.6% sequentially and increased 6.5% on a YoY basis with offshore revenue comprising 59.7% of the revenue mix. Quarterly revenue growth was led by improvement in cloud infrastructure and Digital operations. IT Services Operating Margin for the quarter was at 16.3%, recording a flat sequential growth. Net Income for the quarter was at INR 30.7 billion (USD 374.1 million), an increase of 0.7% QoQ and a decrease of 0.4% on a YoY basis. Operating Cash Flows at 120.6% of Net Income for the quarter was at INR 37.3 billion ($453.8 million), an increase of 60.0% YoY. The EPS has improved to INR 5.61 in Q4 FY23 from INR 5.57 in Q3 FY23 and decreased from INR 5.64 in Q4 FY22.

Outlook

Hence we are assigning a P/E multiple of 18x to the FY25 estimated EPS of INR ~26.6 to arrive at a revised target price of INR 479 (Earlier Target price INR 471) per share, an upside of 24.4% over the CMP. Accordingly, we revise our view to a “BUY” rating for the stock.

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