Prabhudas Lilladher has given Buy recommendation for Wipro with a target price of Rs. 500 in its research report issued on Apr 16, 2021
Prabhudas Lilladher’s research report on Wipro
Wipro’s 4QFY21 performance was beat on all counts – i) revenue grew at 3.9% QoQ USD (Ple: 3.5%, Cons: 3.5%) ii) EBIT margin of 21%, 100bps beat on our estimates (Ple: 20%, Cons: 20.5%) iii) strongest ever guidance of 2-4% QoQ CC revenue growth (vs our estimates of 1-3% QoQ CC) and iv) Strong 2HFY21 order book of $7.2 Bn, +33% YoY. Wipro’s growth trajectory has improved since last 3 quarters & strong organic guidance of 2-4% QoQ (Ple:1-3%, Cons: 0-2.5%) shows sustainability. Not just on revenue, we have seen sustained strong large deal momentum also USD 1.4 bn in Q4 (vs. USD 1.2 bn in Q3).
We are clearly witnessing new management focus & aggression towards growth. We value Wipro on FY-23 earnings of 21X (29%/43% discount to Infy/TCS resp.) to arrive at changed TP of INR 500 (earlier: INR476). Wipro is currently trading at 19.9X/17.2X for FY22/23E earnings of INR 21.7/25.0 respectively with EPS CAGR of 17.2% for FY21-23 respectively. Maintain Buy.