Should you buy Wipro post-Q4 results?

Brokerages retained their bullish view on Wipro after it posted 0.14% quarter on quarter (QoQ) growth in consolidated net profit (attributable to shareholders) at Rs 2,972.30 crore for the quarter ended March 31. The figures stood at Rs 2,968 crore in the preceding quarter ended December 31. The net profit of the company increased by 27.78% on a year-on-year basis.

On the other hand, consolidated revenue increased by 3.67% QoQ to Rs 16,245 crore during the quarter under review. The scrip traded 4.13% higher at Rs 448.80 at around 9.20 am (IST). On the other hand, the benchmark BSE Sensex traded 0.13% higher at 48,868 at around the same time.

Commenting on Q4 results, Nirmal Bang Securities said, “Wipro delivered QoQ CC (constant currency) revenue growth (3%) and margin (21%), which were a tad higher than our expectations. This is the best growth it has delivered in 10 years in the Q4 and third successive quarter of good growth under the new CEO, Thierry Delaporte. The revenue growth guidance for Q1FY22 is relatively strong at 2-4% QoQ in CC terms, which will translate into 11- 13% YoY CC growth-a first in many years (or possibly the last decade).”

The brokerage has an ‘Accumulate’ rating on Wipro with a price target of Rs 465.

Sharekhan also maintained a ‘Buy’ rating on Wipro with an unchanged price target of Rs 510, given large deal TCVs (total contract values) and a strong demand environment for the digital transformation programme.

The brokerage further added that margins are likely to be impacted by wage hike to senior staff, the ramp-up of large deals, investments in front-line capabilities, and skill-based premium. However, margin headwinds would be partially offset by strong revenue growth, higher offshoring, and operational efficiencies.