Q2FY23 Preview: Wipro: Revenues seen at Rs227,029 million; PAT at Rs27,752 million

11 Oct 2022 , 03:00 PM

Result Date: 12th October, 2022
Recommendation: Reduce
Target Price: Rs380

Analysts at IIFL Capital Services believe that inorganic contribution could aid Wipro’s growth in the September 2022 quarter. They expect constant currency revenue to grow 4.2% sequentially in Q2 (organic growth of 2.9%), with potential softness in certain pockets of discretionary spending by clients. Wipro’s EBIT margin could expand 30 basis points sequentially, as the impact of partial wage hikes is offset by operational efficiencies.

The company could guide to 1-3% sequential growth in constant currency revenue in the December 2022 quarter.

Important management insights to watch out for:

• Quantum and number of large deal wins
• Deal pipeline
• Outlook for discretionary spending, as it has significant exposure to consulting business
• Margin levers for the second half of the financial year
• Hiring and attrition trends

	September 2022 estimates	QoQ change	YoY change
Revenue (US$ mn)	2,797	2.3%	8.4%
Revenue (Rs. mn)	227,029	5.5%	15.4%
EBIT (Rs. mn)	33,146	7.4%	(2.4) %
EBIT margin	14.6%	30 bps	(270) bps
Profit After Tax (Rs. mn)	27,752	8.3%	(5.3) %
EPS (Rs.)	5.1	8.3%	(5.4%) %

Source: IIFL Research