Buy Wipro, target price Rs 474: Prabhudas Lilladher

Prabhudas Lilladher has a buy call on Wipro with a target price of Rs 474. The current market price of Wipro is Rs 423.5.

Wipro, incorporated in the year 1945, is a large cap company with a market cap of Rs 231575.61 crore, operating in IT software sector.

Wipro's key products/revenue segments include software services, networking, storage equipment, servers, software licenses and other operating revenue for the year ending 31-Mar-2020.

Investment rationale
The brokerage says Wipro's new CEO is taking right steps towards the transformation journey, however it believes integration benefits may take time to showcase.

The brokerage said, historically, Indian IT services have a very limited success story in creating a consulting base organically or inorganically. This acquisition will impact the brokerage's EPS estimates by ~7.5% for FY22E. Acquisition will dilute FY2022E EBIT margin by 302 bps.

Financials
For the quarter ended 31-12-2020, the company has reported a consolidated total income of Rs 16324.10 crore, up 4.30 per cent from last quarter's total income of Rs 15651.40 crore and up 1.52 per cent from last year same quarter's total income of Rs 16080.20 crore. Company has reported net profit after tax of Rs 2987.70 crore in latest quarter.

Promoter/FII Holdings
Promoters held 74.01 per cent stake in the company as of Dec 31, 2020, while FIIs held 8.46 per cent, DIIs 6.08 per cent and public and others 11.45 per cent.