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Dolat Capital Report
According the the brokerage firm Dolat Capital Wipro's valuations are reasonable, while steady execution is awaited.
The brokerage has revised rating to ‘Accumulate' with a target price of Rs 200, valued at 15x on FY28E earnings, with an upside potential of 13%, from the current market price of Rs 178.
While TCV deal wins remain healthy, conversion is subject to slow decision making. FY27E earnings raised mildly by 1.6% on FX while FY28E earnings largely unchanged.
Wipro Q1 Results Highlights
Wipro's IT services revenue was a slight miss at -1.2% QoQ in CC (brokerage's estimate: -1%) due to slow deal ramp-up, muted discretionary spends and deal slippages to Q2. Margins dipped 129 bps QoQ to 16% (mild beat) saw wage hikes (2 months), deal-ramp-up costs, and AI investments, countered by FX gains and operational efficiencies.
Despite TCV wins of $3.4 billion, Q2 FY27 guidance is weak at -1.5% to 0.5% CC growth, factoring deal ramp-up delays (esp. BFSI), soft discretionary spends & weakness in verticals EMR+Consumer.
Aspirational OPM of 17-17.5% remains, but commentary suggests spend prioritisation, especially in shoring AI capabilities.
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