Buy Wipro; target of Rs 624: Kotak Securities

Kotak Securities' report on Wipro

"Wipro's 3QFY15 beat expectations on revenues as well as margins. The 3.7% CC revenue growth was better than larger peers and the best in the past 12 quarters. We believe this reflects the benefits of the large deals won in the recent quarters. Wipro won 8 large deals in 3Q also. The growth was broadbased with all verticals and geographies reporting growth. Employee additions at 2569 are encouraging after an addition of 6845 employees in 2Q. This was the third successive quarter of additions after reductions in the last three quarters of FY14. Margins also came in better than estimates."

"The company has won marqee deals over the past few quarters, which should help in accelerating growth. The management has guided for a 1% - 3% QoQ growth for 4Q. The EPS works out to Rs.35 (Rs.34) for FY15 and Rs.39.5 (Rs.39) for FY16. We value the stock at Rs.624 (Rs.590, earlier) based on FY16E earnings and upgrade the stock to BUY from ACCUMULATE. Our target valuations are at a suitable discount to larger peers. We will become more positive on the stock after seeing consistent high revenue growth, going ahead", says Kotak Securities research report.

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