Wipro Q4 Results Impact: Shares tumble 3%, near 52-week low; brokerages bullish, see up to 15% upside
Wipro’s net profit swelled by almost 4 per cent year-on-year (YoY), and 4 per cent sequentially to Rs 3,087 crore, while its revenue grew by 28 per cent YoY at Rs 20,860 crore in Q4FY22.
After reporting below the estimated margin in the March quarter, IT major Wipro shares slumped 3 per cent to touch the day’s low level of Rs 493.55 per share on the BSE. The stock is also trading near a 52-week low of Rs 477.8 per share it hit on May 4, 2021.
Wipro’s net profit swelled by almost 4 per cent year-on-year (YoY), and 4 per cent sequentially to Rs 3,087 crore, while its revenue grew by 28 per cent YoY at Rs 20,860 crore in Q4FY22.
In dollar terms, the company reported IT services revenue at $2.72 billion, up 3 per cent quarter-on-quarter, while earnings before interest and tax (EBIT) margin contracted 60 basis points sequentially to 17 per cent during the March quarter.
Wipro gave revenue guidance growth between 1 and 3 per cent for the first quarter of FY23, while the management stated that based on this growth for FY23, the guidance will be 16-18 per cent.
Suggesting what should investors do after the Q4 results, ICICI Direct Research in its report on Wipro said, “Wipro’s share price has grown by around 2.8x over the past five years from nearly Rs 181 in April 2017 to Rs 509 levels in April 2022. We revise our rating on the stock from BUY to HOLD.”
On the target price and valuation front, the brokerage sees its share price surging by 13 per cent to Rs 575 per share as compared to Friday’s closing, while it value Wipro at 21x P/E on FY24E EPS.
“The revenue for the quarter was inline, the EBIT margin was below expectation. The demand environment continues to remain strong as order book in ACV terms grew 30% YoY in FY22. Attrition remains high but has started moderating,” YES Securities said in its note.
“The stock trades at PER of 18.8x on FY24E EPS. We maintain ADD Rating on the stock with a revised target price of Rs 583 per share (14.5% upside), valuing it at 21.5x on FY24E EPS,” it said.
In the past one month, the counter has slipped 18 per cent as compared to 4 per cent decline in the S&P BSE Sensex.
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