Q2FY24 Preview: Wipro: Revenues seen at Rs. 228,044 million, PAT at Rs. 30,134 million

16 Oct 2023 , 05:17 PM

Result date: October 18, 2023

Recommendation: Reduce

Target price: Rs. 380       

Analysts at IIFL Capital Services expect revenue to decline 1% cc on a sequential basis, closer to the lower end of the company’s guided range. IT Services EBIT margins are expected to remain flat sequentially, as decline in revenues is offset by productivity improvements. The reported margins are expected to expand by 130 basis points sequentially, driven by productivity improvement and lack of one-off losses on IT products. Analysts at IIFL Capital Services expect Wipro to guide to 0-2% cc sequential growth in Q3FY24. 

Profit After Tax (PAT) could grow 5% sequentially.

Important management insights to watch out for:

• Q3FY24 guidance
• Quantum and number of large deal wins
• Demand outlook for key verticals
• Outlook for discretionary spending, given Wipro’s exposure to consulting
• Levers to drive margins closer to pre-COVID levels
• Comments on recent senior management exits

	September 2023 estimates	QoQ change	YoY change
Revenue (US$ mn)	2,742	(1.3)%	(2.0)%
Revenue (Rs. mn)	228,044	(0.1)%	0.7%
EBIT (Rs. mn)	37,412	8.4%	15.1%
EBIT margin	16.4%	130 bps	210 bps
Profit After Tax (Rs. mn)	30,134	5.0%	13.3%
EPS (Rs.)	5.7	10.3%	16.6%

Source: IIFL Research