Wipro share price: Expert pegs price target at Rs 545, stop-loss at Rs 440
Wipro share price: Kotak Institutional Equities says that Wipro is making good progress in its turnaround journey. Growth from large clients, energizing the organization and large deal wins are a good indicator of progress. Kotak raised FY2022-24E revenue estimates by 2-3%
Wipro share price: Kotak Institutional Equities says that Wipro is making good progress in its turnaround journey. Growth from large clients, energizing the organization and large deal wins are a good indicator of progress. Kotak raised FY2022-24E revenue estimates by 2-3%. Kotak forecast organic revenue growth rate of 11.2% with the gap in growth rates with larger peers compressing to 200-400 bps. Wipro share price closed at Rs 469, down Rs 3.75 or 0.8%. Wipro Share price moved from Rs 427.4 to Rs 469, nearly 10% in the last one week.
Kotak says Wipro reported in-line revenues for the March 2021 quarter. Its large-deal focus and customer-first approach have begun showing results with a new mega-deal announcement. Revenue growth guidance of 2-4% in constant currency is encouraging. Kotak forecasts constant currency organic revenue growth of 11.2% in FY2022, up from 10.5% earlier and raises FY2022-24E EPS estimates by 4-6%. Kotak raised Face Value to Rs 480, while maintaining ADD Rating.
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Kotak highlights that Large clients led growth in revenues; client metrics begin improving Sequential revenue growth of 3% was in the upper quartile of 1.5-3.5% band. Revenue growth was led by top 5 and top 10 clients that grew by 6.6% and 7.2% qoq in USD terms. Margin decline was on account of wage revision and promotions for junior and mid-level employees.
Kotak says that Wipro guided for 2-4% sequential revenue growth in next quarter. The June quarter is Wipro’s weakest (strongest for the industry) due to productivity reset and idiosyncratic factors. June 2021E is different with healthy 2-4% sequential revenue growth guidance. Wipro announced a large Total Contract Value (TCV) of US $ 1.4 bn for the March 2021 quarter which demonstrates progress.
Technical Analysis on Wipro: Buy Wipro for Target of Rs 545 and stop-loss at Rs 440
Ashis Biswas, Head of Technical Research at CapitalVia Global Research says that he expects Wipro to continue to maintain higher growth momentum driven by strong deal book and execution. He expects operating margin to report above the consensus. Technically a bullish flag pattern is appearing in its daily chart around Rs 425 level. Wipro has been trading in an upward trending channel. It has posted a fresh breakout in January 2021, and since then, it has been trading above it, which indicates a positive outlook on the stock. Ashis recommends a Buy on Wipro for Target of Rs 545 and stop-loss at Rs 440
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