Wipro Q3 Results Review - Green Shoots In Consulting, Discretionary Spend: IDBI Capital

IDBI Capital Report

Wipro Ltd.’s Q3 FY24 results were in line with consensus estimate. Going forward, the company has guided -1.5%-0.5% indicating improvement in demand.

The company is seeing early signs of a return to growth in consulting, as demonstrated by the double-digit growth in order bookings in Capco business.

Wipro is also seeing some green shoots in discretionary spend. Further order book of $ 3.8 billion (book to bill of 1.43 times) will boost revenues. Hence, we now expect revenue growth to improve -3.4% YoY in FY24E to 4% YoY and 9% YoY growth in FY25E and FY26E.

We have revised margin estimates upwards leading to 1.3% increase in our earnings per share estimate.

We have also introduced FY26E in our estimates. We upgrade our rating from 'Hold' to 'Buy' with a revised target multiple of 20 times versus 17 times leading to target price of Rs 535 (versus Rs 390 earlier).

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