Wipro Ltd Some cheer on revenue growth, retain REDUCE :Emkay,

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Wipro Ltd

Some cheer on revenue growth, retain REDUCE

REDUCE

CMP: Rs368                                        Target Price: Rs360

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n     Sep’11 qtr revenue performance was a tad better than expectations and is nearly the 1st beat in 6 qtrs albeit aided by strong performance in the recently acquired SAIC entity

n     IT svcs mgns declined by ~220 bps QoQ( V/s exp of -190 bps) despite strong revenues, weak currency impacted by full impact of wage increments and SAIC consolidation

n     Dec’11 quarter revenue guidance of ~2-4% QoQ is decent however fares unfavorably to peer Infosys (+3.2-5.4% QoQ)

n     Retain REDUCE with a revised TP of Rs 360 (V/s Rs 320 earlier) as we raise our FY12/13E EPS by 2/8.6% driven largely by lower currency resets