Wipro advances over 3% post Q1 results; should you buy?

Shares of Wipro were trading over 3 per cent higher during Thursday's session after the IT firm posted a 12.5 per cent rise in consolidated net profit at Rs 2,387.6 crore for the April-June quarter. Wipro guided for up to 2 per cent sequential revenue growth for the July-September period.

Revenue of the company increased by 5.3 per cent to Rs 14,716.1 crore during the reported quarter, compared with Rs 13,977.7 crore in the year-ago period. The Bengaluru-based company's consolidated income rose by about 5 per cent to Rs 15,566.6 crore during the said quarter.

Brokerage firm Sharekhan said that Wipro delivered lower-than-expected revenue performance for Q1FY2020. However, adjusted EBIT IT margin remained a tad ahead of estimates. Management highlighted that the capital return policy would be maintained at 40-50 per cent of net profit despite change in taxation policy, as free cash flow to net profit remains strong at 98 per cent.

“We maintain 'Hold' with a revised price target of Rs 285,” Sharekhan said.

However, global financial firm Credit Suisse maintained ‘Under-perform’ rating on Wipro with a target price of Rs 240. On the other hand, Macquarie retained ‘Neutral’ stance on the company with a target price of Rs 270.

Macquarie sees lower PAT growth for FY20-21E by 1.6-4.3 per cent and believes revenue growth to remain sub-par to industry.

The shares of the company closed 3.64 per cent higher at Rs 269.15 on BSE.