Accumulate Wipro; target of Rs 680: P Lilladher

Prabhudas Lilladher's report on Wipro

"Wipro Digital’, the digital business unit of Wipro, acquired Designit, a strategic design firm specializing in designing transformative product-service experiences. This investment will strengthen ‘Wipro Digital’ presence in digital space. Founded in 1991 in Aarhus, Denmark, Designit is one of the world’s largest, privately-held design firms. It employs 300+ professionals in 9 offices globally. It delivers product-service experiences to clients in healthcare, telecom, banking, automotive, and retail verticals."

"Wipro has acquired Designit for ~$95mn (€85m), which includes a performance based contingent consideration payable over 3 years. The Final payout could range between 70%-105% of purchase consideration. Designit has revenue of $30mn (€27mn) and it is Wipro’s first big step in generating $1bn of revenue from its Wipro Digital arm. We see the acquisition as fairly valued as it will add to the capabilities of Wipro Digital."

"We see the acquisition as positive for Wipro. Moreover, valuation comfort restricts material downside from here. We retain our “Accumulate” rating on the stock with a target price of Rs 680", says Prabhudas Lilladher research report.

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