Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Wipro (WIPR.BO)
Buy: Transformation in Progress
Agree with the Nasscom guidance on industry growth — While the Nasscom
guidance is not unreasonable, given the macro, Wipro would strive for industry
leading growth. Budgets are likely to be flattish, but the company believes that
spending would be a more relevant metric to focus on. Pricing remains stable.
Outlook on verticals — (1) BFSI – seeing some challenges in investment
banking in Europe; does not see challenges in closure/spending on retail and
insurance. (2) Telecom equipment segment remains weak (3) Retail – saw
segment slowing towards the end of last year, could be partly seasonal.
Seeing a pickup in offshoring — The decision on offshoring is largely
influenced by the commitment of the vendor to the local market, investments
made and the number of employees stationed. Wipro is now seeing greater
traction in countries like Japan and France after being present in these markets
for 10 and 5 years respectively.
Discretionary spends — There are delays in decision making on larger
discretionary projects, though not incrementally over Q3. There are no
slowdown/cancellations in projects that are already commissioned. Client
spending is focused on short cycle projects with clearer visibility on RoIs. Wipro
is also seeing a domain-specific branch out in ERP implementations.
Investments in technologies — (1) Cloud – focusing more on software and
business process (on BPaaS and SaaS through partner, build or buy), and lesser
on the infrastructure side – Wipro is following an asset light strategy with the
objective not to build products, but services around it. (2) Mobility – focus moving
to enterprise/app from devices earlier. (3) Analytics - $450m today with ~80%+
from traditional areas like data warehousing, business intelligence. Is seeing
these traditional services moving towards real time – will explore M&A
opportunities in these areas.
Wage inflation under control — Wipro expects wage hikes to be in the high
single digits range, and expects to take a final call around April, ahead of the
wage cycle in June. Although rhetoric around visas picks up in the run-up to the
US elections, Wipro is not seeing this slowing down business.
Maintain Buy — The restructuring has delivered good progress with client
mining and employee attrition showing marked improvement yoy. The new
management team has aggressively tried to focus on new areas - which should
position Wipro well going forward. The stock trades at ~15x FY13E - remain
Buyers.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Wipro (WIPR.BO)
Buy: Transformation in Progress
Agree with the Nasscom guidance on industry growth — While the Nasscom
guidance is not unreasonable, given the macro, Wipro would strive for industry
leading growth. Budgets are likely to be flattish, but the company believes that
spending would be a more relevant metric to focus on. Pricing remains stable.
Outlook on verticals — (1) BFSI – seeing some challenges in investment
banking in Europe; does not see challenges in closure/spending on retail and
insurance. (2) Telecom equipment segment remains weak (3) Retail – saw
segment slowing towards the end of last year, could be partly seasonal.
Seeing a pickup in offshoring — The decision on offshoring is largely
influenced by the commitment of the vendor to the local market, investments
made and the number of employees stationed. Wipro is now seeing greater
traction in countries like Japan and France after being present in these markets
for 10 and 5 years respectively.
Discretionary spends — There are delays in decision making on larger
discretionary projects, though not incrementally over Q3. There are no
slowdown/cancellations in projects that are already commissioned. Client
spending is focused on short cycle projects with clearer visibility on RoIs. Wipro
is also seeing a domain-specific branch out in ERP implementations.
Investments in technologies — (1) Cloud – focusing more on software and
business process (on BPaaS and SaaS through partner, build or buy), and lesser
on the infrastructure side – Wipro is following an asset light strategy with the
objective not to build products, but services around it. (2) Mobility – focus moving
to enterprise/app from devices earlier. (3) Analytics - $450m today with ~80%+
from traditional areas like data warehousing, business intelligence. Is seeing
these traditional services moving towards real time – will explore M&A
opportunities in these areas.
Wage inflation under control — Wipro expects wage hikes to be in the high
single digits range, and expects to take a final call around April, ahead of the
wage cycle in June. Although rhetoric around visas picks up in the run-up to the
US elections, Wipro is not seeing this slowing down business.
Maintain Buy — The restructuring has delivered good progress with client
mining and employee attrition showing marked improvement yoy. The new
management team has aggressively tried to focus on new areas - which should
position Wipro well going forward. The stock trades at ~15x FY13E - remain
Buyers.
No comments:
Post a Comment