Motilal Oswal: Wipro’s Q1 Revenues In Line; Margins A Surprise
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Motilal Oswal Report
Wipro’s ability to control costs and collections justifies the improvement in EBIT margin/cash conversion, despite the sharp drop in revenue first quarter. While full impact of the Covid-19 pandemic on pricing and working capital cycle is yet to play out, Wipro’s outlook on managing margin stability (verses last year) and healthy cash conversions are impressive.
Motilal Oswal upgrades their earnings per share for fiscal 2021 and 2022 by 6%-12% respectively largely led by margin surprise. Before turning constructively positive on the stock, brokerage awaits a refresh of the company’s strategy and further evidence related to execution.
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