Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

ADD on Wipro - Improving growth visibility - HDFC Securities

Posted On: 2021-04-17 03:28:06 (Time Zone: UTC)


Mr. Apurva Prasad, Institutional Research Analyst, HDFC Securities and Mr. Amit Chandra, Institutional Research Analyst, HDFC Securities

We maintain ADD on Wipro, following a strong revenue performance and better than expected margin performance. Revenue growth of 3.0% QoQ CC was broad-based and 1QFY22 guidance of +2-4% QoQ growth indicates a continuation of strong momentum. The deal pipeline remains robust and the company won 12 large deals (Telefonica) with a net-new TCV of USD 1.4bn. Wipro clocked a total TCV of USD 7.1bn (USD 2.6bn net new) for 2HFY21, which is impressive and provides growth visibility (~4% YoY growth from new deals). Wipro under the new structure is focusing on revving the growth engine led by large deal wins, leveraging partner ecosystem and higher investments in talent. Key positives include (1) strong guidance, (2) pick-up in deal wins, (3) robust cash generation (OCF of ~137% of net income), and, (4) margin decline of only 64bps QoQ despite wage hike. We increase our FY22/23E EPS by +4.4/4.7% to factor in better growth visibility for FY22E. Our target price of INR 475 is based on 20x FY23E EPS (~20% discount to INFY). The stock is trading at 20.3/18.2x FY22/23E EPS.

4QFY21 highlights: (1) Revenue growth of 3% QoQ CC (est. +2.7% QoQ) was at the upper end of the guided range (2) IT Services EBIT margin stood at 21.0%, impacted by wage hike for ~80% of the employees (3) Growth was led by Consumer/Technology/BFSI/ENU verticals (4) Offshoring stood at 54.5% (+180bps QoQ), Utilisation at 86% (-30bps QoQ) and Attrition increased to 12.1% (+110bps QoQ) (5) Wipro will roll out wage hike for remaining 20% of employee effective June'21 and will be giving bonuses and promotions across the organisation.

Outlook: We have factored in +18.8/+8.5% USD revenue growth for FY22/23E respectively; implying 1QFY22 revenue growth of 3.0%. IT services EBIT Margin factored in at 20% for 1Q and 17.8/18.2% for FY22/23E, resulting in EPS CAGR of 10.2% over FY21-23E.

Shares of WIPRO LTD. was last trading in BSE at Rs.469.25 as compared to the previous close of Rs. 431. The total number of shares traded during the day was 5049338 in over 79418 trades.

The stock hit an intraday high of Rs. 473.5 and intraday low of 437. The net turnover during the day was Rs. 2344616283.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.


Other Headlines:

Q4FY21 Result Update - Pidilite Industries - ICICI Direct

Escorts Ltd - Q4FY21 First Cut - ICICI Direct

Jindal Stainless - Q4FY21 First Cut - ICICI Direct

Maintain BUY on Sonata Software - Growth visibility improves - HDFC Securities

Maintain BUY on KEC International - Near term challenges persist - HDFC Securities

Maintain BUY on Kalpataru Power Transmission - In-line performance - HDFC Securities

Tata power Q4FY21 Results Review - Inline result; alternative to InvIT on cards - HDFC Securities

Mahindra Lifespaces Q4FY21 Results Review - On track - HDFC Securities

Mphasis - Q4FY21 first cut: Muted performance - YES Securities

Voltas - Q4FY21 first cut: All round beat with strong operating performance led by EMPS segment - YES Securities

HG Infra Engineering - Q4FY21 first cut: Stellar performance - YES Securities

Polycab India - Q4 FY21 First cut - YES Securities

JMC Projects (India) Ltd - Q4FY21 Result Update - YES Securities

Asian Paints Ltd - Q4FY21 Result Update - YES Securities

Lupin - Q4FY21 Result Update - YES Securities

Godrej Consumer Products Ltd - Q4FY21 Result Update - YES Securities

Orient Electric Ltd - Q4FY21 Result Update - YES Securities

Matrimony.com - Q4FY21 Result Update - YES Securities

Birla Corporation Ltd - Q4FY21 Result Update - YES Securities

Lupin Q4FY21 Results Review - Positives in the price - HDFC Securities

Jindal Steel & Power - Net debt to remain comfortable as 6mtpa Angul expansion commences - ICICI Securities

Hindalco Industries - Saturation of an earnings trigger - ICICI Securities

Indigo Paints - Differentiation is the key; initiate at ADD - ICICI Securities

Lupin - Margin improvement factored in valuations - ICICI Securities

Blue Star - Focusing on core competencies - ICICI Securities

KEC International - Strong growth, healthy cashflow - ICICI Securities

Kalpataru Power & Transmission - Healthy growth, asset sales to aid cashflow - ICICI Securities

Asian Paints - Leader demonstrating leadership - ICICI Securities

Prince Pipes and Fittings - Beat on all counts - Q4FY21 Result - ICICI Securities

Polymer price tracker - PVC prices fall after a year; volatile journey ahead - ICICI Securities

Westlife Development - Good 4Q; retains store expansion target - ICICI Securities

Pidilite Industries - Input cost inflation impacts performance - ICICI Securities

UPL - Strong volume growth maintained - ICICI Securities

Piramal Enterprises - DTA derecognition and interest reversals weigh on earnings; strategic priorities remain in place - ICICI Securities

Q4FY21 Company Update - Saregama India - ICICI Direct

Q4FY21 Result Update - Asian Paints - ICICI Direct

Cadila Healthcare - Divests animal health business - ICICI Securities

Q4FY21 Result Update - Granules India - ICICI Direct

Q4FY21 Company Update - Firstsource Solutions - ICICI Direct

Q4FY21 Company Update - Sonata Software - ICICI Direct

Company Update - Cadila Healthcare - ICICI Direct

Q4FY21 Result Update - Kalpataru Power - ICICI Direct

Q4FY21 Result Update - KEC International - ICICI Direct

Q4FY21 Company Update - Matrimony.com Ltd - ICICI Direct

Maintain REDUCE on Asian Paints - Exceeds expectations - HDFC Securities

JMC Projects Results Report - Poised for growth - HDFC Securities

Maintain ADD on Godrej Consumers - Miss in 4Q margin; inspiring addition to team - HDFC Securities

Maintain BUY on Birla Corporation - Healthy performance - HDFC Securities

Subscriber watch - Bharti wins more market share across categories - ICICI Securities

Siemens Ltd - Healthy margins with growth recovery - ICICI Securities


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020