Wipro Ltd - Virtual Analyst Meet Update - ICICI Direct

We attended the virtual analyst meet of Wipro. The company, like other IT companies, expects robust acceleration in digital technologies. Geographically, Wipro expects faster growth from Europe & APMEA region while vertically it expects growth from BFSI, retail & consumer, energy & utilities and manufacturing. The new CEO also highlighted his strategy of: 1) simplify operating model, 2) build talent at scale, 3) accelerate growth, 4) strengthen clients & partnership and 5) lead with business solution. For accelerating growth, the CEO's focus is on large deals, client mining, strategic partnership and M&A. Wipro is aiming at growth with sustainable margins leading to better cash flow and optimal capital allocation.

Valuation & Outlook

Wipro, under the new CEO, is addressing some of the past challenges of the company of lower focus on geographies outside US and large deals. In addition, the company's focus on improving sales and higher investment to drive growth bodes well for revenue growth. Wipro aims to accelerate growth without compromising margins. This, coupled with healthy capital allocation policy, improving tech spends in digital, prompt us to be positive on the company. Hence, we maintain BUY on the stock with a target price of Rs. 435/share (19x FY23E EPS). Key risk is 1) over centralisation, 2) margin sustainability and 3) exodus of talent impacting growth.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Wipro_AnlstMtUpdate_Nov20.pdf

Shares of WIPRO LTD. was last trading in BSE at Rs.342.65 as compared to the previous close of Rs. 345.2. The total number of shares traded during the day was 353914 in over 5683 trades.

The stock hit an intraday high of Rs. 349.45 and intraday low of 341.8. The net turnover during the day was Rs. 122428863.

Source : Equity Bulls

Keywords