Motilal Oswal has come out with its fourth quarter (January-March) earnings estimates for the technology sector. The brokerage house expects Wipro to report a 0.9 percent growth quarter-on-quarter (degrowth of 0.6 percent year-on-year) in net profit at Rs 2212.2 crore.
Sales are expected to increase by 1.3 percent Q-o-Q (up 4.2 percent Y-o-Y) to Rs 12143.1 crore, according to Motilal Oswal.
Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 1.6 percent Q-o-Q (down 3.6 percent Y-o-Y) to Rs 2717.7 crore.
Motilal Oswal's Report on Wipro:
For 4QFY15, WPRO guided for revenue of USD1.814b-1.85b, up 1-3 percent QoQ. The guidance given is in constant currency and based on the average 3Q cross currency rates. We estimate cross currency headwinds of 220bp during the quarter.
Our growth estimate for 4QFY15 stands at 0.3 percent in USD terms and 2.5 percent in constant currency terms, which is at the higher end of the guidance band.
Our overall INR revenue estimate is INR121.4b, up 1.3 percent QoQ, and we assume realised currency rate to be INR62.7/USD (realised INR/USD at WPRO in 3QFY15 was 63.2).
Overall operating profit margin estimate is 19.4 percent, up 10bp QoQ. Our gross margin estimate is 31.2 percent, up 30bp QoQ, and our SGA estimate is 11.8 percent, +20bp QoQ. In IT Services, we estimate EBIT margin of 22.3 percent, +50bp QoQ. We expect PAT of INR22.1b, up 0.9 percent QoQ.
The stock trades at 16.4x FY16E and 14.1x FY17E earnings.
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