Brokerages raise Wipro price targets after Q2 results

Brokerages raised target price on Wipro after its second-quarter result but most of them have retained ratings equivalent to neutral or sell on the stock as they believe valuations are expensive and growth will lag peers.

Wipro on Tuesday posted a 3.2% sequential growth in consolidated profit for the quarter ended September and announced a share buyback of Rs 9,500 crore.

Haitong Securities has raised target price by 40.5% to Rs 274 and Jefferies by 29.2% to Rs 310. Others have raised target prices by over 4-16%.


On the rating front, Antique has downgraded the stock to hold from buy, while CLSA, Jefferies and Haitong have maintained underperform rating. Goldman and Ambit have a sell recommendation, Nomura has retained a reduce rating and Motilal Oswal has retained a neutral rating with an unchanged target price of Rs 385.

Jefferies said Wipro's second-quarter result was ahead of expectations and guidance for 1.5-3.5% sequential growth in the third quarter surprised positively but the brokerage has maintained underperform rating on expensive valuations and lower growth profile.

For Goldman Sachs, the guidance for the third quarter was largely on expected lines.

"...Wipro continues to have the weakest growth profile among its peers," said Goldman Sachs. Once the buyback support is behind, the stock should re-rate lower, reflecting its weaker growth fundamentals where Wipro is expected to continue to lose market share to its larger peers TCS and Infosys, said Goldman Sachs.