KR Choksey has given Buy recommendation for Wipro with a target price of Rs. 602 in its research report issued on May 02, 2022
KR Choksey’s research report on Wipro
Wipro Ltd (WPRO) Q4FY22 performance was inline with our estimate. Dollar Revenue was up3.1% QoQ in CC term to USD 2,722mn (KRChoksey est. USD 2,728Mn). Rupee revenue grew by 2.7%QoQ to INR 208,600Mn (KRChoksey est. INR 209,729Mn). Reported operating margin was down of 58bps to 16.3% QoQ supported by growth in consulting and engineering services, and ~40% of the order book is from cloud. Reported Net profit grew by 4% QoQ to INR 30,873Mn (KRChoksey est. INR 30,293Mn) with margin of 16.3%. Some of the near-term concerns include (1) pressure on margins (ITS margins expected to operate below the 17-17.5% EBITM band over the next few quarters) on acquisition integration and supply-side inflation and (2) incremental growth, with shorter cycle deals (acquisitions) adding volatility. Employee intake of ~45K YoY will offset the impact of attrition surge however the ongoing talent crunch and rise in discretionary cost will keep margins under check.
Our target price of INR 602 is based on 23x Mar-24E EPS with EPS CAGR of ~10.2% over FY22-24E.