Analyst Research Report Snapshot

Title:

Wipro Ltd. (Wipro) | Q2FY14 Result Update

Price:

$46.00

Provider:

IndiaNivesh Securities Pvt Ltd

Date:

23 Oct 2013

Pages:

5

Type:

AcrobatPDF

Companies referenced:

WIPR.NS

Available for Immediate Download
Summary:

Wipro Ltd. (Wipro) | Q2FY14 Result Update In-line Q3FY14 $-revenue Guidance; Limited upside potential: Downgrade to HOLD Q2FY14 Results Highlights: Wipro Ltd (Wipro) Q2FY14 performance was largely in-line with our expectations on all fronts. IT services $Revenue grew by 2.7% Q/Q to $1631 mn (INSPL est $1632 mn) led by Global IT, BPO and Infocrossing services, partially offset by decline in IMEA segment. Consolidated rupee revenue went up 12.9% Q/Q to Rs.109.9 bn (v/s Rs. 97.3 bn in Q1FY14) driven by IT services (+12.7% Q/Q) and System & Services/Products (+14.8% Q/Q). During the quarter, EBIT grew by 26.8% Q/Q to Rs.22.4 bn driven by IT Services EBIT (+26.9% Q/Q) and System & Services/Product EBIT (16.0% Q/Q). EBIT margin performance during the quarter expanded at 20.4% (v/s 18.2% in Q1FY14). Interest Charge/other income during the quarter stood at Rs.656mn/Rs.3412mn (v/s Rs.495mn/Rs.3361mn in Q1FY14), respectively. The company’s tax rate during the quarter was 23% (v/s 21% in Q1FY14). During the quarter, Wipro reported net forex gain of Rs.160 mn v/s Rs. 1656mn of forex gain in Q1FY14. Net profit went up 19.2% Q/Q to Rs19.4 bn, which was slightly ahead of INSPL estimate of Rs.18.4bn. Adjusting other income & forex, net income went up 40.6% Q/Q to Rs.15.8 bn (v/s Rs. 11.3 bn in Q1FY14). Valuations: At CMP of Rs.515, the stock is trading at P/E multiple of 17.7x FY14E and 15.8x FY15E revised earnings estimate. Third quarter FY14 $-revenue guidance remains the positive surprise. Further, uptake in discretionary budget and slight revival in global economy could lead to outperformance. Wipro’s re-organization to reduce overlaps, improve deals flow started paying in the form of $-revenue growth. However, due to limited upside potential, we downgrade our rating to HOLD from BUY but revise our target price upward to Rs.546 [valuing at 16.9x FY15e] from Rs.442 on Wipro.

Why buy analyst research?

  • Institutional quality research
  • Available for Immediate Download
  • Detailed company or industry insight
  • Print or save
  • 24 hour customer support
Return to previous page without adding this item to your cart.
Email Customer Support.

About Analyst Research

Analyst research reports are available for immediate download after purchase. You will have unlimited access to the report for 24 hours after purchase, to download, print or save it as many times as you wish. Analyst Research provided by Reuters does not constitute investment advice, and is not endorsed by Reuters Research. This information is protected by copyright and intellectual property laws. More information on Analyst Research.