Buy Wipro, target price Rs 750: ICICI Direct

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ICICI Direct has buy call on Wipro with a target price of Rs 750. The current market price of Wipro Ltd. is Rs 586.25.

Time period given by analyst is one year when Wipro Ltd. price can reach defined target.

Wipro Ltd., incorporated in the year 1945, is a Large Cap company (having a market cap of Rs 319695.84 Crore) operating in IT Software sector.

Wipro Ltd. key Products/Revenue Segments include Software Services, Networking, Storage equipment, Servers, Software Licenses for the year ending 31-Mar-2021.

Financials

For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 20791.50 Crore, up 3.06 % from last quarter Total Income of Rs 20173.60 Crore and up 27.37 % from last year same quarter Total Income of Rs 16324.10 Crore. Company reported net profit after tax of Rs 2964.70 Crore in latest quarter.

Investment Rationale
Wipro had guided for 2-4% CC growth in Q4 for IT services. The brokerage expects the company to report 3.5% QoQ CC growth in revenues in IT services. It expects dollar revenue growth of 3.2% QoQ, factoring in 30 bps cross currency headwind. The company is expected to report 2.7% QoQ rupee growth. EBIT margins in global IT services are expected to decline by 30 bps QoQ, due to impact of salary hike amid higher attrition. Overall EBIT margins are expected to decline 20 bps QoQ due to weak performance in IT services. Consequently, PAT is expected to be flattish QoQ. Investor interest: commentary on recent M&A, deal wins, vertical commentary, commentary of client’s IT budget and revenue guidance.

Promoter/FII Holdings
Promoters held 73.01 per cent stake in the company as of 31-Dec-2021, while FIIs owned 9.34 per cent, DIIs 2.77 per cent.

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