Hold Wipro: target of Rs 500: Sharekhan
Sharekhan’s research report on Wipro
Wipro’s IT services reported revenue of $2,657.4 million, down 0.3% q-o-q and 6.6% y-o-y, in constant currency (CC) terms, in line with our estimate of $2,647.4 million due to weakness across Communications, Technology, Manufacturing, Consumer, and Energy, Natural resources, and Utilities. IT services margin improved 40bps q-o-q to 16.4%, beating our estimate of 15.4%, aided by operational excellence despite absorbing the impact of two additional months of salary increase in Q4.The company provided weaker-than-expected revenue growth guidance for IT services -1.5 to 0.5% in CC terms for Q1FY25 and expects IT services EBIT margin to be range bound, reflecting continuity in challenges around discretionary spend.
Outlook
We maintain HOLD on Wipro with a revised price target (PT) of Rs.500, given the strong order book, lower base, and increased traction from acquired units especially Capco, which would assist in driving better growth in FY25 compared to FY24. At CMP, the stock trades at 19.4/18.1x its FY25/26E EPS.
This news update indicates that Sharekhan, a financial research and broking firm, has a “Hold” rating on Wipro with a revised target price of Rs 500. Here’s a breakdown of what this means for investors:
- Hold Rating:Â Sharekhan doesn’t recommend buying or selling Wipro shares at the current price. They believe the stock price will likely stay around the current level in the near future.
- Target Price of Rs 500:Â This is the price that Sharekhan analysts believe Wipro’s stock could reach in the long term, based on their analysis of the company’s fundamentals and future prospects.
Here are some additional points to consider:
- Reasons for Hold Rating:Â Sharekhan might have revised their rating due to Wipro’s recent Q4 results, which showed a decline in profit and revenue. They might be waiting to see if the company can improve its performance before recommending a “Buy.”
- Positive aspects:Â It’s important to note that Wipro still beat analyst expectations for profit in Q4. Sharekhan might acknowledge this positive aspect while remaining cautious overall.
- Target Price vs. Current Price:Â The current price of Wipro’s stock might be near Rs 500 or slightly higher or lower. Without knowing the exact current price, it’s difficult to say if Sharekhan’s target suggests potential upside or downside.
What you can do:
- Research Wipro’s Q4 results:Â Analyze the company’s financial reports, news articles, and analyst opinions to understand the reasons behind their performance.
- Consider your investment goals:Â Are you looking for short-term gains or long-term growth? A Hold rating might be suitable if you have a long-term investment horizon and believe in Wipro’s future potential.
- Do your own research:Â Sharekhan’s rating is just one opinion. Consider other financial experts’ views and conduct your own analysis before making any investment decisions.