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What should investors do with Wipro after Q1 results: buy, sell or hold? –

Wipro share price hit a new high in the opening trade on July 16, a day after the IT services firm reported a consolidated net profit of Rs 3,242.6 crore for the Q1FY22, up 35.7 percent year-on-year (YoY) and 9 percent quarter-on-quarter (QoQ).

The company reported a net profit of Rs 2,390.4 crore in Q1FY21 and Rs 2,972.3 crore in Q4FY21.

Revenue for the quarter under review came in at Rs 18,252.4 crore, up 22 percent against Rs 14,913.1 crore in the year-ago period. IT services segment revenue stood at $2,414.5 million, up 12.2 percent quarter-on-quarter (QoQ) and 25.7 percent year-on-year (YoY).

Also read: Wipro’s Q1 profit jumps 36% YoY to Rs 3,242.6 crore, revenue rises 22%

IT services operating margin was at 18.8 percent, a decrease of 29 bps YoY, while net income was Rs 3,230 crore, an increase of 35.2 percent YoY.

Wipro expects revenue from its IT services business to be in the range of $2,535 million to $2,583 million. This translates to a sequential growth of 5 percent to 7 percent, it said.

The stock was trading at Rs 577, up Rs 1.25, or 0.22 percent. It has touched a 52-week high of Rs 580. It has touched an intraday high of Rs 580 and an intraday low of Rs 568.25.

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Here is what brokerages have to say about the stock and the company after Q1 earnings:

Citi | Rating: Buy | Target raised to Rs 655 from Rs 615

The brokerage firm believes that Q1 revenue and guidance surprised, while margin, attrition trend and TCV were weak. Growth was a combination of 4.9 percent QoQ organic growth and significantly better numbers at Capco. Our new estimates for revenue growth are 27 percent/11 percent for FY22/23; EPS growth of 15 percent/6 percent. Raise target multiple to 28x from 26x for FY23.

UBS | Rating: Neutral | Target: Rs 470

The stock should see some upgrade to consensus earnings. The recent run in the stock could cap near-term upsides. Lower TCV addition could cause some concern.

CLSA | Rating: Underperform | Target raised to Rs 560 from Rs 540

The company’s constant currency revenue growth was well above its guidance and our estimates. It will normalise as 5-7 percent QoQ. Q2 revenue growth guidance implies 1.8-3.8 percent organic growth.

Morgan Stanley | Rating: Underweight | Target raised to Rs 560 from Rs 520

Execution on revenue growth has improved meaningfully. Positive surprise drives higher EPS estimates. Consistent strong execution will be needed before multiples match the peer group.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.