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Yes Securities Report
Wipro Ltd. reported broadly inline financial performance for the quarter. The revenue growth was inline with expectation and Ebit margin slightly above expectation.
Wipro's sequential growth was (1.5%) QoQ in USD terms, led by healthcare vertical (up 7.8% QoQ). Revenue declined by 1.7% QoQ in constant currency terms. There was sequential improvement in Ebit margin (up 1 basis points QoQ) led by operating efficiency.
The moderation in employee attrition continues as last twelve months attrition was down 130 ps QoQ to 14.2%.
The near term demand environment remains challenging as the clients remain cautious regarding the evolving macroeconomic situation especially in the U.S. and Europe; and consequently, we expect muted revenue performance in near term.
We estimate revenue compound annual growth rate of 6.6% over FY23‐26E with average Ebit margin of 15.2% over the period.
We maintain our 'Neutral' rating on the stock with revised target price of Rs 505/share at 19.5 times on FY26E earnings per share.
The stock trades at PER of 20.2 times/17.9 times on FY25E/FY26E EPS.
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