The share price of Wipro in Monday's trading session took a surprising hit from investors and this is despite posting a good December 2018 (Q3FY19) result. Wipro was trading at Rs 341.10 per piece, down by 1.47% on BSE at around 0924 hours. However, Wipro stock at one point even plunged by 3.10% after clocking an intraday low of Rs 335.45 per piece. Wipro in its Q3FY19 result, posted a consolidated net profit of Rs 2,544 crore rising by a massive 31.43% from Rs 1,935.9 crore a year ago same period.

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Similarly, Q3FY19 PAT of Wipro also witnessed a double-digit growth of 34.93% compared to PAT of Rs 1,885.6 crore in preceding quarter. Consolidated revenue came in at Rs 15,059.5 crore in Q3FY19, registering an increase of 10.17% as against Rs 13,669 crore in Q3FY18 and also up by 3.56% from Rs 14,541 crore in Q2FY19. 

Revenue was boosted due to stellar performance seen in BFSI segment, as Wipro recorded a 24.77% growth to Rs 4,597.9 crore in Q3FY19 compared to Rs 3,684.9 crore in Q3FY18.

For nine month period of FY19, Wipro's revenue stood at Rs 43,578.82 crore up by 7.02% from Rs 40,718.5 crore in the corresponding period of previous year. Also, net profit was at Rs 6,525.1 crore in 9MFY19 higher by 9.63% from Rs 5,951.9 crore in 9MFY18.

However, despite recording positive result in Q3FY19, looks like investors are still not convinced about how Wipro shares will perform.

Should you invest in Wipro? 

HDFC Securities says, "Wipro’s focus on Digital (33.2% of rev, +6.0% QoQ) and strong growth in BFSI (31% of rev, +5.3% CC QoQ) is driving growth. ENU (13% of rev, +4.6% CC QoQ) growth can be under risk led by volatility in crude prices."

HDFC Securities added, "Margin recovery has been robust (+260bps YoY) led by operational efficiency and lower G&A but further expansion is difficult. Wipro’s USD revenue growth CAGR of 4.2% for FY18-21E is the lowest in the Tier-1 IT pack. We expect USD revenue growth of 1.6/5.4% and IT services EBIT% at 18.3/18.5% for FY19/20E. The stock currently trades at a P/E of 17.9/16.2x FY19/20E EPS (~2% premium to Tier-1 average). The 6M outperformance (+22% vs 2% fo Nifty IT) is based on margin expansion, expected buyback and bonus issue of 1:3."

Following which, HDFC says, "Further re-rating seems difficult based on near term growth challenges, we maintain our NEUTRAL rating with a TP of Rs 330 based on 14x Dec-20E earnings."

On the other hand, CLSA said, "The sharp surprise in its margin was led by a sharp reversal of PDD, automation and fall in subcontractors – some of which should reverse over CY19. However, strong margin execution over the last two quarters leads us to upgrade margins by 100bps. A combination of 1% revenue cut and 100bps margin increase results in a 4-6% upgrade to FY19-21CL EPS and TP. We retain SELL given lack of convincing growth acceleration."

Similarly, Emkay added, "While better outlook and improvement in margins bring a small 3.5% change each to our FY20/FY21 EPS estimates, we still believe that Wipro’s underperformance will continue for some more time, given the ongoing restructuring and macro challenges in its Healthcare vertical. Maintain Reduce, with a target price of Rs310."