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Here's what brokerages have to say about Wipro post Q4 results 

Here's what brokerages have to say about Wipro post Q4 results 

The IT services giant reported 3.8% year-on-year rise in consolidated net profit at Rs 3,087 crore for the quarter ended March 2022.

Here's what brokerages have to say about Wipro post Q4 results  Here's what brokerages have to say about Wipro post Q4 results 

Shares of Wipro Limited tanked over 3 per cent to hit an intraday low of Rs 493.15 on BSE after the company reported earnings for the quarter ended March 2022. 

IT services giant reported 3.8 per cent year-on-year rise in consolidated net profit at Rs 3,087 crore for the quarter ended March 2022. It had reported a net profit of Rs 2,972 crore in the year-ago period.   

Sequentially, the net profit increased 3.9 per cent from Rs 2,969 crore in the previous quarter. 

The stock opened a tad higher at Rs 512.10 against the previous close of Rs 509. With a market capitalisation of Rs 2,70,956 crore, the shares stand lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. 

Wipro's revenues rose 28 per cent to Rs 20,860 crore in the quarter under review as compared to Rs 16,245 crore in the same quarter last fiscal. Meanwhile, IT services segment revenue was at $2,721.7 million, an increase of 3.1 per cent QoQ and 26.4 per cent YoY. However, the company's margin contracted 130 basis points. 

Brokerage house HDFC Securities noted that Wipro delivered in-line Q4 performance but Q1FY23E growth guidance and Q4 large deal bookings were sub-par. 

It noted that the company's key positives included robust addition to USD 100 million client bucket, large client mining, and 30% growth in ACV in FY22; momentum in engineering services; and improved capabilities augmenting pipeline (all-time high), supported by recent acquisitions. 

However, it said that some of the near-term concerns include pressure on margins on acquisition integration and supply-side inflation and incremental growth, with shorter cycle deals (acquisitions) adding volatility. It has maintained 'Add' with a target price of Rs 585, valuing Wipro at 22x (24x earlier) FY24E EPS. 

Prabhudas Lilladher noted that Wipro’s Q1FY23 revenue growth guidance is weaker than consensus expectations. We cut EPS estimates by 7.5% for FY23/24 led by cut in EBIT margin by 120bps/110bps for FY23/24, due to margin pressures from higher manpower costs and investments in sales & technology capabilities, it said. 

"We arrive at DCF based target price of Rs 616 (earlier 735) with implied target multiple of 23x P/E on FY24 EPS (earlier 25x). Wipro is currently trading at attractive valuations of 21x/19x on FY23/24E earnings of Rs. 24/27 respectively with Revenue/EPS CAGR of 11%/12% for FY22-24," it added. 

ICICI Securities has revised the rating on the stock from 'Buy' to 'Hold'. It values Wipro at Rs 575 i.e. 21x P/E on FY24E EPS. Strong organic growth, consistent financials, industry leading margins and healthy capital allocation policy prompt us to be positive on the stock, it said. 

Meanwhile, Wipro’s twelve-month attrition number has risen to 23.8 per cent from 22.7 per cent at the end of December 2021, reflecting to an industry-wide trend of steadily rising attrition. 

Published on: May 02, 2022, 2:19 PM IST
Posted by: Tanya Aneja, May 02, 2022, 2:17 PM IST