Hold Wipro, target price Rs 465: ICICI Direct

ICICI Direct has hold call on Wipro with a target price of Rs 465. The current market price of Wipro Ltd. is Rs 416.
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 226793.24 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 31-03-2022, the company reported a Consolidated Total Income of Rs 21362.80 Crore, up 2.75 % from last quarter Total Income of Rs 20791.50 Crore and up 27.32 % from last year same quarter Total Income of Rs 16778.70 Crore. Company reported net profit after tax of Rs 3094.10 Crore in latest quarter.

Investment Rationale
Wipro had guided for 1-3% CC growth in Q1 for IT services. The brokerage expects the company to report 2.5% QoQ CC growth in revenues in IT services (including one month revenue from Rizing). It expects dollar revenue growth of 1.5% QoQ, factoring in 100 bps cross currency headwind. The company is expected to report 3.1% QoQ rupee growth aided by rupee depreciation. EBIT margins in global IT services are expected to decline 50 bps QoQ, due to impact of higher employee costs amid higher attrition. Overall EBIT margins are expected to decline 60 bps QoQ due to weak performance in IT services. Consequently, PAT is expected to decline 5.2% QoQ. Investor interest: commentary on recent M&A, Deal wins, vertical commentary, commentary of client’s IT Budget and revenue guidance and annual wage hike in Q2 and its impact on margins

Promoter/FII Holdings
Promoters held 73.0 per cent stake in the company as of 31-Mar-2022, while FIIs owned 8.12 per cent, DIIs 3.24 per cent.