Accumulate Wipro; target of Rs 660: P Lilladher

Prabhudas Lilladher's report on Wipro

"Management talked about "Turbo charging the core (Run)" and "Securing the future (Change)". The RUN will be driven by scale, hyper‐automation, quality improvement and IP capabilities, whereas the CHANGE focus is built on reimagining the businesses with new themes like IoT, Open Source, AI, Digital etc. The company has showcased its IP framework like ServiceNXT and AI framework ‐ HOLMES. We see these proactive investments as positive steps to drive the growth engine."

"According to Management, hunter team TCV win has improved by 12x over last one years. However, challenges with few top accounts (Europe and Oil & Gas) have eroded all the gains. Nevertheless, other growth accounts have grown in‐line with industry (4‐6pp higher than Wipro's avg.). Moreover, Management has made changes in sales’ incentive structure to accelerate growth ‐ 1) Sales professional will be evaluated by incremental growth 2) Cross selling of other services ‐ need to sell at least 3 out of 5 services to be entitled for variable pay. We see this new incentive structure to drive better hunting and mining simultaneously."

"We see new strategic initiatives as steps in right direction to kick‐start the growth engine. But, near term challenges would pose challenges. We remain circumspect about Wipro's growth prospect in FY16. Retain accumulate with a target price of Rs 660", says Prabhudas Lilladher research report.

For all recommendations, click here

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.

Read More