Analyst Corner: Wipro: Maintain ‘buy’ with unchanged TP of Rs 550

Wipro delivered another quarter of strong results. IT services revenue grew 3% QoQ (in cc), in line with both our (3.1%) and Street’s (3%) estimates. Operating margin continued to surprise for IT services at 21% (down 70bps QoQ), well ahead of our and Street’s estimates of 19.6% and 20.4% respectively. Management has guided for sequential growth of 2–4% for Q1FY22, largely in line with estimates. TCV of the order book remains strong and grew 33% YoY for H2FY21, the highest TCV ever reported. The pipeline remains healthy too. All in all, we remain optimistic about the demand environment. Maintain ‘BUY’ with an unchanged TP of `550 as we roll over the valuation to Q2FY23E.