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Wipro
For 1QFY2012, Wipro reported lower-than-expected results. The company’s IT services
revenue came in at US$1,408mn, up merely 0.5% qoq, because of a decline in price
realisations – onsite as well as offshore. In CC terms, price points – onsite and offshore –
declined by 1.7% and 1.2% qoq, respectively. The revenue figures include US$10mn from
SAIC’s oil and gas business, which Wipro acquired in April 2011. The full quarter impact
of US$40mn because of SAIC will flow in 2QFY2012. Volume growth for the global IT
business of the IT services segment came in at 1.8% qoq, led by 5.8% qoq growth in onsite
volumes; offshore volume growth was tepid at merely 0.2% qoq. In rupee terms, revenue
of the IT services segment came in at `6,405cr, up 1.8% qoq. Revenue from IT products
and consumer care and lightening segments grew strongly by 20.9% and 17.6% yoy,
respectively. EBIT margin of the IT services and consumer care and lightening segments fell
by 10bp and 22bp qoq to 22.0% and 11.9%, respectively; while for IT products, EBIT
margin increased by 56bp qoq to 4.2%. Overall EBIT margin declined by 35bp qoq to
17.5%. PAT came in at `1,335cr qoq, down 3.0% qoq.
For 1QFY2012 (April–June 2011), Cognizant has given revenue guidance of US$1.45bn
(results are not yet out), which (if achieved) now surpasses Wipro’s IT services revenue and
makes Cognizant the third largest Indian IT player. Revenue guidance for Wipro’s IT
services segment for 2QFY2012 looks lacklustre at US$1.436bn–1.464bn, only 2–4% qoq
growth, as 2Q is seasonally the strongest quarter for IT companies. Wipro continues to lag
its peers and is undergoing new organisational restructuring at the top end. Thus, we
expect volumes to remain tepid. Accordingly, we downgrade our recommendation to
Accumulate from Buy with a target price of `419.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Wipro
For 1QFY2012, Wipro reported lower-than-expected results. The company’s IT services
revenue came in at US$1,408mn, up merely 0.5% qoq, because of a decline in price
realisations – onsite as well as offshore. In CC terms, price points – onsite and offshore –
declined by 1.7% and 1.2% qoq, respectively. The revenue figures include US$10mn from
SAIC’s oil and gas business, which Wipro acquired in April 2011. The full quarter impact
of US$40mn because of SAIC will flow in 2QFY2012. Volume growth for the global IT
business of the IT services segment came in at 1.8% qoq, led by 5.8% qoq growth in onsite
volumes; offshore volume growth was tepid at merely 0.2% qoq. In rupee terms, revenue
of the IT services segment came in at `6,405cr, up 1.8% qoq. Revenue from IT products
and consumer care and lightening segments grew strongly by 20.9% and 17.6% yoy,
respectively. EBIT margin of the IT services and consumer care and lightening segments fell
by 10bp and 22bp qoq to 22.0% and 11.9%, respectively; while for IT products, EBIT
margin increased by 56bp qoq to 4.2%. Overall EBIT margin declined by 35bp qoq to
17.5%. PAT came in at `1,335cr qoq, down 3.0% qoq.
For 1QFY2012 (April–June 2011), Cognizant has given revenue guidance of US$1.45bn
(results are not yet out), which (if achieved) now surpasses Wipro’s IT services revenue and
makes Cognizant the third largest Indian IT player. Revenue guidance for Wipro’s IT
services segment for 2QFY2012 looks lacklustre at US$1.436bn–1.464bn, only 2–4% qoq
growth, as 2Q is seasonally the strongest quarter for IT companies. Wipro continues to lag
its peers and is undergoing new organisational restructuring at the top end. Thus, we
expect volumes to remain tepid. Accordingly, we downgrade our recommendation to
Accumulate from Buy with a target price of `419.
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