Wipro Ltd.|Q2FY15 Result Update | Wide Range in Q3FY15 $-Rev Guidance Continue; Maintain HOLD with TP of Rs.611 ::IndiaNivesh

Please Share::

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

��

-->
 During the quarter, interest expenditure went-up 974.9% Y/Y to Rs.244mn
(v/s Rs.23 mn in Q2FY14) due to increase in debt level from Rs.3.6 bn in FY13
to Rs.16.4 bn in Q2FY15. Other income decreased 81.7% Y/Y to Rs.6 mn (v/s
Rs.31 mn in Q2FY14). During the quarter, tax rate stood at 4.4% (v/s 34.5% in
Q2FY14) due to MAT credit and deferred tax. The company reported net loss
of Rs.200 mn (v/s net profit of Rs.334 mn in Q2FY14) on account of low EBITDA
base.
Increased Parents’ focus on Asia & India operations…
BASF parent intends to invest €10bn in Asia by 2020, and aims to increase the local
production to reach 75% of total sales. With domestic production of petrochemicals
in Asia increasing and foreign imports likely to reduce in the long term, a key
facilitator for margin expansion and revenue growth. The parent aims to increase
Asia segment revenue to 25bn Euro in 2020 as compared to 12bn Euro in 2012
(8.6% CAGR). On the same line BASF India has announced few Brownfield
expansions:
 BASF is setting up precious metal catalyst plant at its existing manufacturing
site at Mangalore. The overall investment for project is estimated at Rs.100
mn (Euro 1.5 mn) and same will be funded through internal accruals.
Commencement of the production is likely to start in Q2FY15.
 Leased approximately 30 acres of Agricultural land at Lonikand, Pune for 20
years to set up an Agricultural Research Station for testing new agro chemical
compounds.
Valuation
At CMP of Rs.1245, the stock is trading at P/E and EV/EBITDA multiple of 32.4x/
27.8x and 17.3x/14.6x FY15E/FY16E estimates. The parents focus to double Asia’s
revenue in seven year could lead to aggressive expansion in India. Additionally,
introduction of low carbon construction solution, advanced pharmaceutical
products, environment friendly coatings and solutions for intensive agriculture
should facilitate revenue growth. However, the key concern for BASF India is declining
margins and instability in quarterly performances. We maintain NEUTRAL stance
on BASF (PT of Rs.779 is already achieved).

LINK
http://www.indianivesh.in/Admin/Upload/635499967489617500_Wipro%20_Q2FY15%20Result%20Update.pdf