We recommend BUY and assign 22x P/E multiple to its FY23E earnings of Rs. 24.1 per share which gives a TP of Rs. 522 per share, an upside of 14%.

Restructuring of business, large deals to drive growth We believe Wipro possesses all the key ingredients of robust growth in the long run. The company has strong full services capabilities across applications, infra, BPS and engineering, which should help it as integrated deals gain prominence. Further, the induction of a new CEO with focus on profitable growth make us positive on its future growth. This, coupled with the new CEO's focus on simplification of organisation, improving client mining, focus on fewer verticals and geographies to drive growth are...

Wipro (WPRO) reported better-than-expected revenue growth of 3.4% QoQ CC, on the higher end of the guidance band (1.53% QoQ CC). Growth was broad-based across verticals, with five of seven verticals showing good QoQ growth. WPRO's continued margin improvement (+250bp QoQ / +330bp YoY) and strong cash generation (FCF/PAT at 133%) were the key positives in 3Q. In 9MFY21, IT Services reported revenue (USD)/EBIT/PAT of 3.2%/10.2%/6.9%. Wipro reported 12 deal closures and deal TCV of USD1.2b in 3Q, including USD700m from Metro AG. It further guided for USD CC revenue growth of...

Wipro's revenue grew at 3.4% QoQ CC (Ple: 3%, Cons: 3.2%) & 3.9% QoQ in USD terms. Revenue growth was broad based growth led by 5.6% QoQ rise in E&U;, 5.2% QoQ in Consumer BU and 5.5% QoQ growth in Health BU (all in...

Margin surprises yet again; Revenue execution is key Superlative revenue growth surprises delivered in 3QFY21 by both TCS (4.1% QoQ in CC terms on its large base) and Infosys (5.3%) make the 3.4% growth by Wipro look staid. However, this is the best it has delivered in 36 quarters and that too in the second quarter under the new CEO. What's more, it beat ours and consensus expectation (~2.5%). This combined with a very sharp 240bps pick-up in EBIT margin QoQ in IT Services (a big surprise) could induce upgrades in street EPS estimates. The stock price run-up (31% up in 1 month, >100% in 6 months) already prices in a pickup. CEO, Thierry Delaporte, talked about an obsession with growth' while maintaining respectable margins at its recent analyst meet (Meet). Without giving out specific numerical targets Thierry...

Wipro (WPRO) delivered an upbeat QoQ performance in Q3FY21 with 3.4% CC revenue growth, ahead of our estimate of 2.7%.

Rising adoption of smartphones, high internet speed and social distancing (due to Covid-19) has changed consumer behaviour. Consumers now prefer to transact (buy a product) virtually over the smartphone via an app instead of physical transaction. This has led to virtualisation of business models. In addition, to keep business up and running in a work from home scenario, technology is gaining traction. As a result, new age technologies like cybersecurity (to protect business from work from home scenario), app development (to help customer transact virtually) and Cloud (to enable...

With multiple deal wins' management has proved their mettle in execution. Growth has become top priority for Wipro as the new CEO aims to transform the company into more outward focused. Even in last quarter Wipro has surprised street with higher revenue guidance of 1.5-3.5% for Q3FY20. Shift from traditional 3 axes model to 2 axes model lead to reduction of P&Ls; from 25 to 4 driving in sizable savings. Wipro's IT services EBIT margins came at 19.3% (+30bps QoQ) in 2Q21 slightly ahead of our and street estimates 19% underscores the new CEOs focus of profitable growth....

We recommend BUY and assign 18x P/E multiple to its FY23E earnings of Rs. 24.0 per share which gives a TP of Rs. 432 per share, an upside of 19%.

We initiate coverage on Wipro Ltd (Wipro) with a BUY rating and target Price of Rs 432 valuing at 18x FY23E EPS.

We attended the virtual analyst meet of Wipro. The company, like other IT companies, expects robust acceleration in digital technologies. Geographically, Wipro expects faster growth from Europe & APMEA region while vertically it expects growth from BFSI, retail & consumer, energy & utilities and manufacturing. The new CEO also highlighted his strategy of: 1) simplify operating model, 2) build talent at scale, 3) accelerate growth, 4) strengthen clients & partnership and 5) lead with business solution. For accelerating growth, the CEO's focus is on large deals, client mining,...

bold management initiatives as initial signs of trajectory reversal. Thierry Delaporte (new CEO) along with senior leadership team held a virtual analyst day to highlight Wipro's new strategy. The new CEO has outlined new strategic direction, 1) accelerate growth, 2) strengthen clients and partnerships, 3) lead with business solutions, 4) build quality talent at scale, and 4) simplify the operating model. Management has recognized that speed is the new cost, making strategy more client focused thus enabling agility in...

Wipro's (WPRO) analyst meet was focused on a slew of strategic changes being implemented by its new CEO.

The key focus of Wipro's Analyst Day was on operational changes and steps undertaken to accelerate revenue growth. The company expects the shift to four Strategic Market Units and two Global Business Lines to help streamline operations and increase its focus outside of the US. Creation of a global account executive (GAE) role would help WPRO better address long-standing issue in client mining and retention. We are less sure of the utility of delineating clients by region (unlike by industry at peers) as this could impact its ability to tap into global accounts and...

Obsession with growth' has to now show up in numbers While the broad strokes of the strategy of the new CEO, Thierry Delaporte, were revealed post 2QFY21 results, the new organizational structure (to be implemented from 1 January 2021) was revealed a week back and greater details of the strategy were shared at an analyst meet yesterday. While the new strategy seemed incremental in its approach, when we first heard it post 2QFY21, it now appears to be a dramatic shift, compared not so much to that of peers, but to Wipro's old one. Thierry's five-themed strategy includes (1) accelerate growth focus and scale in certain markets and sectors to achieve leadership (2) strengthen clients and partnerships - investment in existing...

The key focus of Wipro's Analyst Day was on operational changes and the steps undertaken to accelerate revenue growth. The company expects the shift to four Strategic Market Units (SMUs; focused on sales) and two Global Business Lines (GBLs; focused on delivery) to help streamline operations and increase its focus outside of the US. It is also de-prioritizing some sectors (Hospitality, Airlines, Public Sector, etc.) and regions (Asia, Africa, and South America 2-3% of revenues) to increase the focus on high-growth businesses. In our view, streamlining P&L; to four SMUs (v/s 20 P&Ls; earlier) should free...

We increase our FY22/23E EPS by +2.6/4.7% and target multiple to 18x (vs. 16x earlier) to factor growth acceleration. Our target price of Rs 390 is based on 18x Sep-22E EPS. The stock is trading at 18.2/16.8x FY22/23x, which is ~20% premium to 5Y average P/E multiple. Wipro: We maintain ADD on Wipro, based on better than expected revenue and in-line margin performance. Revenue growth of 2% QoQ CC was broad-based and guidance of +1.5 to +3.5% QoQ CC growth in 3Q is better than expectation. The deal pipeline remains strong and sales activity is picking up driven by higher cloud adoption. The company under the new leadership will increase focus on client mining/large deal wins, leveraging partner ecosystem and higher investments in talent. The goal is to make the organisation more lean operationally and deliver profitable growth. Key positives include (1) strong guidance despite furloughs, (2) pick-up in deal activity/wins, (3) robust cash generation (OCF is ~179% of net income), and (4) buyback of Rs 95bn (4.2% of equity, ~30% of net cash) at Rs 400/share

Broad-based recovery across verticals, continued margin resiliency, and strong cash generation were the key positives for the company. The key contours of the new CEOs refreshed strategy growth from focused sectors/markets, continued investment in talent, and a simplified operational model to help improve focus on customers seem to be steps in We upgrade our FY21/FY22E EPS by 3%/2%, largely led by a revised revenue of execution of Wipros refreshed strategy and a successful turnaround from its growth struggles over the past decade before turning more constructive on the stock. Growth focus Focusing on existing accounts; shaping large deals Focus and scale Prioritizing markets/sectors and striving for leadership Offerings Evolving offerings beyond traditional IT offices, focusing on Talent Continuing to invest in building talent Simplified operating model Agile/Lean operating model that would help improve external focus on customer Wipro reported revenue (USD) / EBIT / PAT growth of -3%/5%/-4% YoY v/s our estimate of -4%/3%/-4% YoY.