What should investors do with Wipro shares post Q4 results?

Market


IT company Wipro Ltd posted a 4% increase in its consolidated profit to 3,092.5 crore in the fourth quarter as compared to 2,974 crore in the same period a year ago. The Bengaluru-based company’s consolidated revenue from operations grew by 28% to 20,860 crore from 16,245 crore. 

Wipro expects revenue for the first quarter ending 30 June to be in the range of $2.74 billion-$2.80 billion. This translates to a sequential growth of 1-3%, lower than the 2-4% it had guided for the March quarter.

Those at Motilal Oswal maintained Neutral rating on Wipro shares, with a target price of 540, as they await further evidence of the execution of Wipro’s refreshed strategy, and a successful turnaround from its growth struggles over the last decade, before turning more constructive on the stock.

“Its margins are likely to be below the medium-term guided range of 17-17.5%. Moreover, its capital allocation has started suffering due to elevated investments in Consulting capabilities and should impact FY23E payout as well,” the note stated.

As per Prabhudas Lilladher, Wipro’s new strategy and investments are progressing well – 60 synergy deals with Capco, 16% more senior leaders closer to clients and 30% YoY growth in cloud ecosystem in FY22. However, material large/mega deal wins or increase in organic revenue guidance from 2QFY23 will be key triggers for the stock going forward. The brokerage house has maintained Buy rating on the IT stock with price target of 616 per share.

Another brokerage Nirmal Bang has cut its target PE multiple further to 18.2x from 19.4x to arrive at a target price of 501 and maintain ‘Accumulate’ stance on Wipro.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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