Live news , top stories, corporate news, company news, sector news, economy news, results analysis news, ceo interviews, fund manager interview, advisor interview, market news, bazaar talk, hot stocks news, ipo news, commodities news, mutual fund news, insurance news, news wire
29 January, 2015 15:48 IST
Wipro to take two more quarters to enter growth arena: RK Global
Source: IRIS Exclusive | 20 Nov, 2012, 12.24PM
Comments  |  Post Comment

RK Global Shares & Securities has re-iterated 'Buy' on Wipro with (Q,N,C,F)* a price target of Rs 413 as compared to current market price (CMP) Rs 358 in its report dated Nov. 19, 2012. The broking firm gave following investment rationale on the stock:

Wipro posted results, 7% lower than our estimates. The company's revenue were flat on QoQ but grew by 17% YoY in Q2FY'13 to Rs 1,05,840 million on the back of muted volume growth despite the pricing improvement. Whereas the onsite price realization was up 1.9% and offshore realization was up by 1.5% but the volume growth is mere 0.2% on QoQ basis. The IT services (79% of sales) grew by 0.7% QoQ to Rs 83,730 million in rupee terms and grew by 1.7% to USD 1,541 million in dollar terms. The Non-GAAP constant currency IT Services Revenue in dollar terms was USD 1,535 million, within the guidance range of USD 1,520 million to USD 1,550 million. Improvement Foreseen.

The financial services industry, especially banking, is in the midst of massive upgrade of existing IT set ups to cope with future regulatory and customer-driven online and mobile services. The management has guided that the financial services industry, especially banking, is in the midst of massive upgrade of existing IT set ups to cope with future regulatory and customer-driven online and mobile services. The company has guided towards a stronger Q3FY'13 performance with IT services USD revenue growth expected at 1.6% (USD 1,560 million) to 3.6% (USD1,590 million) against Q2 range of 0.34% to 2.32%.

However, we do not feel too optimistic on this guidance as we believe that all the three pillars (volume, pricing [pricing saw a good uptick] & utilization) aren't mature yet, but will likely take 2Qs more to enter the growth arena. We have not changed our estimation as we would like to one Q more for any such estimation change for FY'13E/14E. However, if we do it would be solely on the basis of INR appreciation and S&M investments.

At CMP, the stock trades at a P/E of 11.2x and P/BV of 2.8x , using FY'13E EPS and BVPS & P/E of 9.2x and P/BV of 2.2x FY'14E EPS and BVPS. We re-iterate a BUY on Wipro stock with a revamped TP of Rs 413 (15% potential return from CMP). Our TP is arrived at, by using P/E of 12.9x and 3.2x of FY'13E EPS and BVPS of Rs 32 and Rs 127 respectively and P/E of 10.6x and 2.3x of FY'14E EPS of Rs 39 and BVPS of Rs 157.

Click here to view full report

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.

Comments Post comment 
 Post Comment
Name Email
Security Code type    into this box
Related Articles
Shakti Pumps gets listed on NSE on January 29 - 29-Jan-2015 09:47
ICICI Bank organises coin exchange mela in Indore - 29-Jan-2015 09:40
CCEA clears FDI proposals of HDFC Bank - 29-Jan-2015 09:31
CCEA approves Lupin proposal to FII limit cap to 49% - 29-Jan-2015 09:27
Welspun Corp consolidated quarterly earnings zoom 2.33 times - 28-Jan-2015 18:55
Kalyani Forge swings to loss in Oct-Dec quarter - 28-Jan-2015 17:59
Ranbaxy Laboratories consolidated loss widens in Oct-Dec quarter - 28-Jan-2015 17:47
Idea Cellular standalone quarterly profit jumps 64.00% - 28-Jan-2015 17:16
Jyothy Laboratories consolidated quarterly net rises 19.99% - 28-Jan-2015 17:04
Amara Raja Batteries standalone quarterly profit climbs 7.71% - 28-Jan-2015 16:56
Gujarat State Fertilizers & Chemicals standalone quarterly profit climbs 2.24% - 28-Jan-2015 16:52
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer