IDBI Capital downgrades Wipro to 'Reduce'
Source: IRIS | 14 Jan, 2021, 10.48AM
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| 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'."Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.
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