This financial stock is Axis Securities’ top pick of the week. See details here
As one of the largest exporters of IT services in the country, Wipro has expertise in providing banking and financial service solutions. Therefore, Axis’ pick of the week is Wipro Ltd. The brokerage and research firm recommended the buy rating on the stock as its top pick for the week with a target price of ??750 per share.
With the ideal investment horizon for such ideas remaining 6 to 9 months, Axis Securities said its stock selection could offer profit opportunities even for short-term investors. According to the brokerage firm, âthe business of digital transformation is intact for Wipro. The recent trading trend continues to be robust for Wipro and reflects traction in the BFSI, Retail & CPG, Manufacturing and BFSI verticals. Wipro will continue to invest in its digital product, Digital Talent and S&M, which is imperative to drive growth. We believe the COVID outbreak will create huge opportunities in all geographies for Wipro to show strong organic growth in various verticals. “
Wipro management has undertaken cost optimization efforts that help it achieve long-term sustainable operating margins. There are some positive winds like a better range of services, reduced marketing expenses, reduced travel costs, employee restructuring and improved utilization. We believe that becoming more efficient in the business will help them achieve more profitability and higher return ratios, Axis Securities said.
Wipro Ltd has performed excellently on all fronts with turnover at ??19,667 crore, up 8.1% qoq and 30% yoy in CC terms. While the operating result represented a growth of 30.8% over one year at ??3,492 crore, the operating margin decreased 180 basis points to 17.7% quarter on quarter, helped by an unfavorable currency mix and wage increases. Net profit for the quarter grew 34% year on year as it amounted to ??2,931 crores, said Axis Securities. âManagement of the company gives a strong outlook for the third quarter of FY22 with revenue growth of 2-4% in CC terms and their feedback continues to be positive in verticals such as BFSI, high tech media, life sciences and communications, âhe added.
Additionally, the Wipro transaction pipeline remained the industry leader in the second quarter of fiscal 2022 at $ 2.1 billion.
Warning: The opinions and recommendations expressed above are those of individual analysts or brokerage firms, not Mint.
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