HSBC Maintains Hold on Wipro Limited with INR260.00 Price Target

HSBC analyst Yogesh Aggarwal maintains a Hold rating on Wipro Limited with a price target of INR260.00. The company's shares closed at INR266.95 last Friday. Aggarwal is a 4-star analyst with an average return of 10.5% and an 81.25% success rate. Wipro Limited reported a quarterly revenue of INR225.04 billion and a net profit of INR35.7 billion for the quarter ending March 31. The company's corporate insider activity has been negative over the past quarter, with an increase in insiders selling their shares.

Wipro Limited, India's fourth-largest IT player, reported a 10.9% year-on-year increase in net profit for the first quarter, boosted by a reduction in expenses and foreign exchange gains. The company's net profit for the quarter ending June 30 was Rs 3,336.5 crore on revenue of Rs 22,134.6 crore. However, revenue growth was under 1%, with a compression in business across geographies and verticals [3].

Despite a challenging macroeconomic environment, Wipro's corporate insider activity was negative, with an increase in insiders selling their shares. Analyst Yogesh Aggarwal maintains a Hold rating on Wipro Limited with a price target of INR260.00, citing concerns about the company's growth prospects and margin trajectory. The company's shares closed at INR266.95 last Friday [2].

Wipro's Q1 results were mixed, with a decline in revenue and profit sequentially. However, the company's American Depositary Receipts (ADRs) on the New York Stock Exchange surged by more than 3% in opening trades following the announcement. Wipro's performance was driven by a strong BFSI pipeline and deal momentum, with clients focused on cost optimization and vendor consolidation. The company forecast second-quarter revenue in dollars to be between $2.50 billion and $2.6 billion in constant currency, indicating a potential rebound in growth [3].

In the interim, Wipro has declared an interim dividend of Rs 5 per equity share, adding to investor enthusiasm. The company's focus on growth and margin expansion, despite near-term margin pressure, is a positive sign. However, analysts remain cautious, with some expecting a potential top-line recovery contingent on favorable macroeconomic conditions and the positive impact of the Phoenix deal signed in Q4FY25. The company's outlook for the second half of the fiscal year remains promising, with a strong pipeline of deals and a focus on acquiring the right talent for large deals execution [1].

References:
[1] https://www.goodreturns.in/news/wipro-shares-jumped-4-after-q1-why-is-mega-it-rallying-should-you-buy-rs-5-dividend-record-date-soon-1443557.html
[2] https://economictimes.indiatimes.com/tech/information-tech/wipro-q1-net-profit-up-11-to-rs-3337-crore-revenue-flat/articleshow/122669326.cms?from=mdr
[3] https://www.goodreturns.in/news/wipro-shares-jumped-4-after-q1-why-is-mega-it-rallying-should-you-buy-rs-5-dividend-record-date-soon-1443557.html