Bull Vs Bear: Citi positive on Wipro; Goldman Sachs gives ‘sell’ rating

Wipro beat both revenue and margins, but the point with Wipro is that it's been rising all of this week and in fact all of this year. So is it a buy at this stage?

Wipro’s earnings have elicited a mixed response from the brokerages, starting with Citi. Citi is positive on the stock and raised the target price to Rs 655. The key highlight is the 38-quarter high organic revenue growth, and it is forecasting revenue growth to be at 27 percent this year and 11 percent next year, but the earnings per share (EPS) estimates in terms of growth is much lower, and that's on the back of margin pressure. Citi expects the rerating to continue for Wipro despite the supply challenges but is now valuing Wipro at 28 times FY23 PE.

Goldman Sachs is not very convinced and has a sell rating on the stock and the target price is down to Rs 328 vis-à-vis Wipro’s current market price of Rs 575. The key reason is that the organic revenue growth has been boosted by select verticals as well as geographies. It is not broad-based, something that is seen in the case of TCS and Infosys.