As Wipro reports profit decline, should you buy or sell stock?

The market spotlight will fall on Wipro a day after the IT services major reported a consolidated net profit decline of 9.27 percent for September quarter to Rs 2,659 crore from a year ago.

Revenue from operations stood at Rs 22,539.7 crore, a 14.60 percent growth over a year ago.

Some of the numbers were way below expectations while revenue came in line with estimates.

The Bengaluru-based IT major expects December quarter revenue to grow 0.5-2 percent, lower than the consensus Street expectations of 1-3 percent.

Also Read: ‘Certain level of uncertainty’, but currently no slowdown in demand: Wipro CEO Delaporte

Here is what brokerages have to say about the stock and the company after earnings.

Nomura

We have a ‘neutral’ call on the stock with a target price of Rs 380.

Investors need to brace for near-term weakness as margin recovery is likely to be gradual.

Guidance for Q3 is disappointing and alludes to slowdown. We cut FY23-24 EPS (earnings per share) estimates by 3-5 percent.

CLSA

We have an outperform rating on the stock with a target price of Rs 450.

Q2 numbers were in line with a modest growth outlook but valuations are supportive for the stock.

The firm has cut FY23 EPS estimates by 4 percent and FY24 EPS estimates by 1 percent.

JPMorgan

We have an underweight call on the stock with a target price of Rs 360.

Weak momentum for Q3 with margin pressures persisting as environment worsens. We remain Underweight as we continue to expect margin and revenue headwinds.

UBS

We have a neutral call on the stock with a target of Rs 420.

Things are not looking good, at least in the near term. The consulting segment is bearing the brunt of economic slowdown.

Motilal Oswal

We have a neutral rating on the stock with a target price of Rs 380.

We are disappointed by the company’s weak Q3 revenue forecast.

We maintain our neutral stance as we await further evidence of the execution of Wipro’s refreshed strategy, and a successful turnaround from its growth struggles over the last decade before turning more constructive on the stock.

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