Sharekhan's research report on Wipro
Wipro’s IT services reported revenue of $2,657.4 million, down 0.3% q-o-q and 6.6% y-o-y, in constant currency (CC) terms, in line with our estimate of $2,647.4 million due to weakness across Communications, Technology, Manufacturing, Consumer, and Energy, Natural resources, and Utilities. IT services margin improved 40bps q-o-q to 16.4%, beating our estimate of 15.4%, aided by operational excellence despite absorbing the impact of two additional months of salary increase in Q4.The company provided weaker-than-expected revenue growth guidance for IT services -1.5 to 0.5% in CC terms for Q1FY25 and expects IT services EBIT margin to be range bound, reflecting continuity in challenges around discretionary spend.
Outlook
We maintain HOLD on Wipro with a revised price target (PT) of Rs.500, given the strong order book, lower base, and increased traction from acquired units especially Capco, which would assist in driving better growth in FY25 compared to FY24. At CMP, the stock trades at 19.4/18.1x its FY25/26E EPS.
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