Buy Wipro; target of Rs 403: Firstcall Research

Firstcall Research is bullish on Wipro and has recommended buy rating on the stock with a target of Rs 403 in its November 2, 2012 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 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.16106.00 million against Rs.13009.00 million in the corresponding quarter ending of previous year, an increase of 23.81%. Revenue for the quarter rose 16.78% to Rs.106203.00 million from Rs.90945.00 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.6.54 a share during the quarter, registering 23.61% increase over previous year period. EBITDA stood at Rs.24616.00 millions as against Rs.19511.00 millions in the corresponding period of the previous year.”

“At the current market price of Rs.363.00, the stock P/E ratio is at 14.58 x FY13E and 13.00 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.24.91 and Rs.27.93 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 17% and 9% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 9.43 x for FY13E and 8.40 x for FY14E. Price to Book Value of the stock is expected to be at 2.69 x and 2.23 x respectively for FY13E and FY14E. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend buy in this particular scrip with a target price of Rs.403 for medium to long term investment,” says Firstcall Research report.

Public holding more than 90% in Indian cos

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