Wipro Q3 Results Review — Execution Rigor Is The Key Growth Driver; 'Hold' The Stock Says IDBI Capital

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IDBI Capital Report

Wipro Ltd. reported revenue of $2,629 million above our estimates despite of seasonality, however down by 1.2% QoQ mainly driven by execution rigor and continued demand uptick in capco. Company posted revenue growth in the upper end of the guided range which was stemmed by the pickup in demand environment and deal pipeline.

Operating margin stood at 17.5%, up by 70 bps on the back of operating efficiency and conscious efforts in reduction of G&A. Company re-iterated its growth strategy which involves-

1. focus on growing large clients,

2. proactive in shaping large deals through cross selling/up selling along with the existing businesses,

3. building cross-industry solutions,

4. building talent pool with higher proficiency in AI/others and

5. AI-driven services.

Management stated overall demand environment to be positive with resilient large deal pipeline ($961 million) expecting a better conversion cycle.

We expect the company to perform well in the long run, hence, we value the stock at target price of Rs 299 (23x FY27E) by rolling in FY27 with maintaining Hold rating on the stock.

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