Sharekhan has given Buy recommendation for Wipro with a target price of Rs. 510 in its research report issued on Apr 15, 2021
Sharekhan’s research report on Wipro
In-line revenue, margin beats our estimates; CC revenue grew by 3.0% q-o-q, while EBIT margin for IT services contracted by 69 bps q-o-q to 21%; offshore revenue mix remained the highest during Q4. Management provided strong revenue growth guidance of 2%-4% q-o-q, which indicated its aggressive participation in strong demand. Sequential revenue growth would translate to 11%-13% y-o-y growth in Q1FY2022. Margins likely be impacted by wage hike to senior staff, ramp-up of large deals, investments in front-line capabilities, and skill-based premium. Margin headwinds would be partially offset by strong revenue growth, higher offshoring, and operational efficiencies.
We maintain our Buy rating on Wipro with an unchanged PT of Rs. 510, given large deal TCVs and strong demand environment for the digital transformation programme.