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21 April, 2021 15:50 IST
IDBI Capital downgrades Wipro to 'Reduce'
Source: IRIS | 14 Jan, 2021, 10.48AM
Rating: NAN / 5 stars.
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Wipro's (WPRO) Q3FY21 IT service revenue growth of 3.4% QoQ in CC was in-line with our forecast. However, IT services EBIT margin of 21.7%, +245bps QoQ was a big beat to our forecast. This resulted in consolidated EBIT margin improving by 270bps QoQ to 21.2%. Further, EPS of Rs5.2, +20.3%/20.7% QoQ/YoY was also beat to our forecast, said IDBI Capital Markets & Securities in its report.

Q3FY21 large deal TCV stood at USD 1.2 billion (including the USD 700 million deal from Metro AG). Q4FY21 guidance of IT services revenue growth of +1.5% to +3.5% QoQ in CC is in line with our expectation, the broking firm said.

IDBI Capital forecasts IT services revenue growth to pick-up to 7%/6.3% in FY22/23. "We increase our TP to Rs 431 (vs. Rs366 earlier), now based on 20x FY23E (18x earlier). However, given the uptick in the stock we downgrade it to 'Reduce' from 'Accumulate'."

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