Angel Broking has maintained neutral rating on Wipro, in its April 25, 2012 research report.
Angel Broking has maintained neutral rating on Wipro , in its April 25, 2012 research report.
“For 4QFY2012, Wipro’s results came in-line with our expectations. The company’s client base increased to seven in the US100mn+ bracket at the end of FY2012 from three in FY2011, which was a positive sign. The major disappointment came from management’s 1QFY2013 USD revenue growth guidance of -1 to 1%, which is very sluggish as 1Q is typically a good quarter for IT companies. This guidance indicates that management is seeing further delays in deal closures and ramp-up of projects. We recommend Neutral on the stock.”
“For 4QFY2012, Wipro registered a 1.3% qoq decline in its revenue to Rs9,869cr. Revenue from the IT services segment came in at US$1,536mn, up 2.0% qoq. Revenue from the consumer care and lighting segment grew strongly by 25.2% yoy, while the IT products segment reported merely 2.9% yoy revenue growth. EBIT margin of the IT services, IT products and consumer care and lighting business declined by 8bp, 60bp and 61bp qoq to 20.7%, 4.7% and 12.5%, respectively. Wipro’s overall EBIT margin declined by 8bp qoq to 17.2%.”
“For 1QFY2013, Wipro has given USD revenue guidance of US$1,520mn-1,550mn, which translates into qoq growth of -1 to 1% qoq, which is extremely subdued. Now, management’s endeavor is to grow at par with industry’s average revenue growth for FY2013. Nasscom has guided for 11-14% yoy USD revenue growth for FY2013 to achieve this Wipro needs to record at least 3.5% qoq USD revenue growth post 1QFY2013. This number indicates that management is banking more on back-ended growth for FY2013, which makes us slightly cautious about the company’s growth outlook. We expect USD and INR revenue CAGR for IT services to be at 10.3% and 11.0%, respectively, over FY2012-14E. We expect EBIT margin of the IT services segment to slide down to 20.2% in FY2013 from 20.8% in FY2012. We expect a 12.1% and 12.3% CAGR in EBITDA and PAT, respectively, over FY2012-14E. We value the stock at 15x FY2014E EPS of Rs28.6, which gives us a target price of Rs430. We recommend Neutral on the stock,” says Angel Broking research report.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
To read the full report click here
Set email alert for
ADS BY GOOGLE
video of the day
Rupee weakness modest, see yields at 7.60% in Q1: Deutsche