Wipro Q4FY11 Result Update; In line results, Q1 guidance is disappointing; Reduce; Target: Rs 440:: Emkay

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Wipro Ltd

In line results, Q1 guidance is disappointing

REDUCE

CMP: Rs 451                                       Target Price: Rs 440

---

n     IT services rev at US$ 1.400 mn (+4.2% QoQ,+20.1% YoY), marginally ahead of est. However IT svcs EBIT mgns remain flat QoQ at 22.2% ( V/s expectations of ~40 bps increase)

n     March’11 qtr revenue guidance at US$ 1,394-1,420 mn (-0.4%-+1.6% QoQ) disappointing especially as it already builds in ~100 bps cross currency gains

n     Cut our ‘below consensus’ FY12E/13Eby ~5.1%2%  respectively to Rs 23.2/26.2 as we reset organic US$ rev growth expectations to 17%/18% ( V/s 20.6%/17% earlier)

n     Expect EPS downgrades across the street. Retain REDUCE with an unchanged TP of Rs 440. Valuation discount to peers to continue as growth catch remains work in progress