Choice Equity Broking has given Reduce recommendation for Wipro with a target price of Rs. 373 in its research report issued on Oct 13, 2022
Choice Equity Broking’s report on Wipro
Wipro reported Q2FY23 gross revenue at $2.80B (CIER estimate: $2.82B), up 12.9% YoY in CC; gross revenue was Rs.225.4B in INR (CIER estimate: Rs. 223.3B), up 11.5% YoY in INR. The order book TCV grew 23.8% YoY. Net Income for the quarter stood at Rs. 26.6 Bn. ($326.8 million), up 3.5% sequentially and down 8.1% YoY. By segments- the flagship IT Services Segment Revenue stood at $2,798 Mn, showing an increase of just 8.4% YoY; IT Products segment revenue for the quarter was $15.3 Mn; India SRE segment revenue for the quarter was $19.4 Mn. Operating margin came at 15.1%, which was at a significant discount to that of peer companies.
While the stock has been beaten down ~40% in the past one year, we feel that the poor prospects of the company (worsened by 28% of business coming from Europe, including a large chunk of business from Capco acquisition) leave some more downside to the stock. Based on DCF valuation methodology, we change our rating to Reduce and assign a target price of 373 (earlier 400), implying a 17.2x PE (earlier 18x) to forecasted NTM EPS of Rs. 20.9 (earlier 21.1) .
At 17:30 Wipro was quoting at Rs 377.30, down Rs 1.80, or 0.47 percent.
It has touched an intraday high of Rs 387.00 and an intraday low of Rs 376.30.
It was trading with volumes of 656,828 shares, compared to its thirty day average of 638,143 shares, an increase of 2.93 percent.
In the previous trading session, the share closed down 7.03 percent or Rs 28.65 at Rs 379.10.
The share touched its 52-week high Rs 739.80 and 52-week low Rs 376.30 on 14 October, 2021 and 14 October, 2022, respectively.
Currently, it is trading 49 percent below its 52-week high and 0.27 percent above its 52-week low.
Market capitalisation stands at Rs 206,973.19 crore.