Dolat Capital Market has given Reduce recommendation for Wipro with a target price of Rs. 430 in its research report issued on Apr 15, 2021
Dolat Capital Market’s research report on Wipro
Wipro reported 3.0% QoQ CC growth (DE: 3.3%) led by growth in BFSI/Retail/Tech vertical at 2.7%/6.9%/9.9% QoQ. IT services OPM stood at 21.0% down 69bps QoQ (DE: 19.7%) led by lower than expected wage hike impact and growth leverage. Encouraging Quarterly Guidance for Q1 at 2%-4% (excl. acquisitions), implies some acceleration as large deal ramp-up starts from April’21. The growth confidence is also led by strengthening of leadership with as many as 11 new hiring announced (Hires from stronger peers with large deal focus: Exhibit 11). Large Deal TCV stood at $1.4bn in Q4 ($1.2Bn in Q3). Total TCV stood at $7.1bn in H2FY21 (strongest ever). The pipeline remains strong with large number of opportunities within its target client base but expect some volatility in large deal wins on quarterly basis.
Factoring in gradual improvement on multiple parameters, we improve our EPS estm by 3% each for FY22/23E but believes that the gains are well priced in and thus ascribe Reduce rating on the stock with TP of Rs.430 (valued at 20x FY23E EPS).