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Wipro share logs record high post Q1 earnings, here's what brokerages say

Wipro share logs record high post Q1 earnings, here's what brokerages say

The large cap share rose to record high of Rs 589, up 2.3% on BSE

Wipro share has gained 119% in one year and risen 48.56% since the beginning of this year. Wipro share has gained 119% in one year and risen 48.56% since the beginning of this year.

Wipro share scaled all-time high in early trade after the IT firm announced its earnings for the quarter ended June 2021. Later, the share was trading on a flat note falling 0.28% to Rs 573.10 against previous close of Rs 575.75 on BSE.

The large cap share rose to record high of Rs 589, up 2.3% on BSE. The stock has fallen after 2 days of consecutive gain. Wipro stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

Wipro share has gained 119% in one year and risen 48.56% since the beginning of this year.

Total 8.26 lakh shares changed hands amounting to turnover of Rs 47.87 crore on BSE.

Market cap of the firm rose to Rs 3.14 lakh crore on BSE.

The stock fell to a 52-week low of Rs 252 on July 17, 2020.

Wipro posted a 35.6 per cent jump in June quarter consolidated net profit to Rs 3,242.6 crore.

The IT firm exuded confidence in logging double-digit revenue growth in FY22 following stellar Q1 performance and robust demand environment.

The Bengaluru-based company had registered a net profit (attributable to equity holders) of Rs 2,390.4 crore in the year-ago period, as per Indian Accounting Standards (Ind-AS). Revenue from operations rose by 22.3 per cent year-on-year to Rs 18,252.4 crore in the reported quarter.

Also read: Wipro may get employees back to office from September

"We are in an acceleration mode, we have ramped up our supply chain engine and improved our talent acquisition machine and it has certainly helped. We have had a very strong performance in bookings now for three quarters...," Wipro CEO and Managing Director Thierry Delaporte said during a virtual briefing.

Wipro - which gets the bulk of its topline from IT services - provided a strong revenue growth outlook of 5-7 per cent for the September quarter. It expects revenues from the unit to be in the range of $2,535 million to $2,583 million.

Edelweiss has raised target price for Wipro share.

"Management highlighted that medium-term outlook looks strong as all as industries are  moving  towards  digital  transformation  and  cloud  and  spending  good  on  IT infrastructure.  We  believe  this  is  start  of  tech-upcycle  based  on  our  Techolution thesis.

The stock trades at 22.1 times FY22E. We maintain 'BUY' while increasing target price to Rs 680 (25x Q3FY23E) as we roll forward to Q3FY23E," the brokerage said in an earnings review report.

YES Securities has revised target price of the stock to Rs 625 and given an 'Add' call for one year.

"Revenue growth at 12.2% QoQ in dollar terms for IT services was slightly above estimate even after considering the completion of Capco acquisition in the quarter.  Organic growth was 4.9% QoQ. Growth was broadbased as BFSI grew 23% QoQ, consumer grew 14% QoQ and energy and utilities grew 11.8% QoQ; there was some softness in manufacturing vertical.

For Q2FY22, the firm has provided strong revenue guidance of 5-7% sequential growth in IT services.

The valuation remains stretched as its trades at 22x on FY23 earnings. Consequently, we maintain ADD on the stock with revised target price of Rs 625, "the brokerage said.

Motilal Oswal in a report said, "We view the management's growth strategy, continued investment in talent, and a simplified operational model to help improve the focus on customers as a step in the right direction.

We upgrade our FY22E/FY23E EPS estimate by 6% to factor in a better growth performance. We maintain our Neutral stance as we view the current valuation as fair. Our target price implies 23x FY23E EPS."