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 As one of the largest IT services exporter in the country, Wipro has expertise in providing solutions in banking and financial services. Hence, Axis securities pick of week is Wipro Ltd. The brokerage and research firm has recommended Buy rating on the stock as part of its top pick for the week with target price of 750 per share.

With the ideal investment horizon for such ideas remain 6-9 months, Axis Securities said its stock picks may provide some profit-making opportunities even to short-term investors. As per the brokerage firm, “ the digital transformation business is intact for Wipro. Recent deal trend continues to be robust for Wipro and is reflective of traction in 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 that COVID outbreak will create huge opportunity across geographies for Wipro to post strong organic growth over different verticals."

Wipro management has taken cost optimization efforts which help them to gain long term sustainable operating margins. There are some tailwinds like better service mix, reducing the marketing spend, lowering travel cost, employee restructuring and improving utilization. We believe gaining the efficiency over business will help them to get more profitability and higher return ratios, Axis Securities said.

Wipro Ltd has delivered an excellent performance on all fronts with revenue at 19,667 crore, up 8.1% quarter on quarter and 30% year on year in CC terms. While operating profit represented a growth of 30.8% year on year at 3,492 crore, operating margin de-grew by 180 bps and stood at 17.7% quarter on quarter, aided by unfavourable currency mix and wage hikes. Net profit for the quarter reported a growth of 34% year on year as it stood at 2,931 crore, Axis Securities said.  “The company’s management gives strong Q3FY22 guidance at 2%-4% revenue growth in CC terms and its commentary continues to be positive in the verticals such as BFSI, Hi-tech Media, Life Sciences, and Communications," it added.

Additionally, Wipro deal pipeline remained industry leading in second quarter of financial year 2022 at $2.1 billion.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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