Hold Wipro; target of Rs 420: Sharekhan

hold

Sharekhan's research report on Wipro

Wipro's CC revenue growth declined 2.8% q-o-q, below our estimates of a 1.7% q-o-q decline. On a y-o-y basis, revenue growth was led by the healthcare, energy and manufacturing verticals, offset by weakness in the BFSI and Technology and Communication verticals. IT services margins declined 30 bps on q-o-q to 16.0%, in line with our expectation of 16.1%. Large-deal bookings stood at $1.2 billion, up by 9% y-o-y in CC terms. Wipro provided revenue growth guidance in the range of -2% to 1% for Q2FY2024, in line with our expectations.

Outlook

Another weak quarter, persisting uncertainty and further softness in discretionary spends could impact Wipro. The upside seems limited as the stock trades at 17x/15.5x its FY24/FY25E EPS implying recovery trade on account of the Buyback is already done. Hence, we maintain our Hold rating on Wipro with unchanged PT of Rs. 420.

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Wipro - 14 -07 - 2023 - khan