Buy Wipro; target Rs 480: P Lilladher

Prabhudas Lilladher is bullish on Wipro and has recommended buy rating on the stock with a target price of Rs 480 in its March 18, 2013 research report.

"According to the management of Wipro, clouds of uncertainty are finally clearing. The clients are taking IT investments decisions and sales cycle is improving. There is more certainty on spend compared to three months back. Wipro derives ~24 percent (Q3FY13) revenue from IMS service line; however, lags peers in terms of exploiting growth opportunities in the same. The management has invested in tools and technologies in order to competitively bid for IMS contracts. IMS-led deals are structurally poised for lower pricing in each renegotiation; hence, these investments would be one of the key drivers for growth along with stability in margin. The company is also willing to takeover clients' assets and employees.

Hunting & Farming - To drive growth: Hunting: 1) 160 sales professionals, predominantly local professionals, industry experts etc. (recent hires) 2) Targeting F500/G2000 clients 3) Experts are vertically aligned 4) Actively monitoring IT budgets for prospective clients and value proposition being offered to them by Wipro. Farming: 1) ~200+ sales professionals 2) Targeting 138 clients 3) Mega-Gamma account - 55 (To achieve US$50m+ revs in 3 years) 4) Key Growth Account - 83 (To achieve US$30-50m revs in 3 years) 5) Each account has got one Key Client Partner (CEO of the account).

Valuation and Recommendation - Reiterate 'buy' with TP of Rs 480: Wipro has gone through restructuring in the last 15 months. We believe that as the restructuring comes to an end, the execution of strategies hold the key. We believe that better macro-environment would be supportive for the success of their strategies. We expect company to return to industry-leading growth in FY14. We retain our 'buy' rating," says Prabhudas Lilladher research report.

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