Buy Wipro; target of Rs 315: ICICI Direct
ICICI Direct’s research report on Wipro
Wipro’s revenues grew 1.4% QoQ mainly led by 6.3% QoQ growth in digital revenues. However, pressure in traditional revenues arrested the growth. Besides digital, growth was supported by consumer business unit (grew 5.3% QoQ in CC terms) followed by healthcare and BFSI. We expect growth to accelerate in the next two years with room for margin revision upwards from 18.3% estimated in FY21E.
Continued strength in digital and healthy deal pipeline commentary would act as the main growth drivers for Wipro. Additionally, room for margin revision, healthy capital allocation policy and reasonable valuation prompt us to recommend BUY on Wipro. Hence, we revise target price to Rs 315 per share (~16x FY21E EPS).
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