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Apr 23, 2013, 01.13 PM IST | Source: Moneycontrol.com

Buy Wipro; target of Rs 405: Firstcall Research

Firstcall Research is bullish on Wipro and has recommended buy rating on the stock with a target of Rs 405 in its April 19, 2013 research report.

Firstcall Research is bullish on Wipro and has recommended buy rating on the stock with a target of Rs 405 in its April 19, 2013 research report.

"Wipro is India's third largest software services exporter and also has interests in the hardware and consumer care and lighting businesses. The IT Services segment provides research and development services for hardware and software design to technology and telecommunication companies and software application development services to corporate enterprises. The BPO services segment provides services to global corporations. The India and Asia Pacific IT Services and Products segment focuses on addressing the IT and electronic commerce requirements of companies in India, Middle-East and Asia-Pacific regions."

"Wipro Limited is the first PCMM Level 5 and SEI CMM Level 5 certified IT Services Company globally. In the Asia Pacific and Middle East markets, Wipro provides IT solutions and services for global corporations. Wipro’s ADSs are listed on the New York Stock Exchange, and its equity shares are listed in India on the Stock Exchange, Mumbai and the National Stock Exchange, among others. Wipro Ltd provides comprehensive information technology (IT) solutions and services, including systems integration, information systems outsourcing package implementation, software application development and maintenance, and research and development services to corporations globally through its IT services, solutions and products division."

"Wipro provides comprehensive IT solutions and services, including systems integration, Information Systems outsourcing, IT enabled services, package implementation, software application development and maintenance, and research and development services to corporations globally. Wipro Limited is the first PCMM Level 5 & SEI CMM Level 5 certified IT Services Company globally. The company’s net profit jumps to Rs.17287.00 million against Rs.14809.00 million in the corresponding quarter ending of previous year, an increase of 16.73 percent. Revenue for the quarter fell 2.27 percent to Rs.96131.00 million from Rs.98363.00 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.7.02 a share during the quarter, registering 16.52 percent increase over previous year period. EBITDA stood at Rs.22635.00 millions as against Rs.22052.00 millions in the corresponding period of the previous year."

'At the current market price of Rs.368.65, the stock P/E ratio is at 12.28 x FY14E and 11.77 x FY15E respectively. Earning per share (EPS) of the company for the earnings for FY14E and FY15E is seen at Rs.29.57 and Rs.30.84 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 5 percent and 8 percent over 2012 to 2015E respectively. On the basis of EV/EBITDA, the stock trades at 9.06 x for FY14E and 8.67 x for FY15E. Price to Book Value of the stock is expected to be at 3.02 x and 2.90 x respectively for FY14E and FY15E. We recommend ‘BUY’ in this particular scrip with a target price of Rs 405 for medium to long term investment," says Firstcall Research report. 

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