October 25, 2016 / 15:56 IST
Axis Direct's research report on Wipro Wipro delivered lower revenue (USD 1,916 mn, our expectation: USD 1,923 mn). EBIT margin (17.8% in IT Services) supported by strong delivery – utilization (up 310 bps excl. trainees), higher offshore (up 50 bps QoQ) and accelerated automation benefits (released 3,200 in H1). However, lack of broad-based growth (only Healthcare among verticals, Americas among geographies delivered) and client mining was disappointing.
Q3FY17 guidance (incl. recent Appirio acquisition) of 0-2% QoQ is below our expectations as it implies organic growth to be flat at -2.5% (assuming USD 45 mn revenue from Appirio). Margin will face headwinds of Appirio investments and volatility in cross currency.
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