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ICIC
I S
ecurit
ies –
Retail E
quit
y R
esearch
Result
Update
April 18, 2019
CMP: | 285 Target: | 315 ( 11%) Target Period: 12 months
Wipro Ltd (WIPRO)
BUY
Growth likely to be more back ended…
Wipro’s revenues grew 1.4% QoQ mainly led by 6.3% QoQ growth in digital
revenues. However, pressure in traditional revenues arrested the growth.
Besides digital, growth was supported by consumer business unit (grew
5.3% QoQ in CC terms) followed by healthcare and BFSI. We expect growth
to accelerate in the next two years with room for margin revision upwards
from 18.3% estimated in FY21E.
Slow start, growth to pan out in subsequent quarters
Completion of some large projects and slower than expected ramp up in
certain projects accompanied with Q1 seasonality have made the company
pen down a CC guidance of -1% to 1% for Q1FY20E. However post
Q1FY20E, pick up in order pipeline coupled with turnaround in
communication and technology verticals is expected to drive growth in
FY20E. BFSI would continue its momentum but the growth is expected to
moderate compared to 16.1% YoY growth in FY19. Further, healthcare and
manufacturing verticals are expected to improve in each in H2FY20E
creating a stronger growth exit for FY21E.
Digital, deal pipeline to drive growth beyond FY19
Digital revenue was the main growth driver for the company in FY19. Its
contribution in overall revenue pie continues to rise (34.8% of revenue in
Q4FY19 vs. 26.7% in Q4FY18). Transforming legacy to digital, increased
focus on cloud infra and platforms is anticipated to drive digital momentum.
Growth in digital coupled with strong order intake (double digit growth YoY)
and positive commentary on pipeline, we expect Wipro to clock in 7.5%
CAGR to US$9379 million in FY19-21E.
Room for upside in margin estimates
For FY19, IT services EBIT margin stood at 18%. Going ahead, margins in a
narrow band of 18% looks sustainable. Although we expect margins in
Q1FY20E to be lower due to wage hikes, we expect margins to recoup from
Q2FY20E onwards. We expect IT services EBIT margin of 18.1%, 18.3% in
FY20E, FY21E, respectively. However, with recovery in high margin verticals
and easing of pressure in traditional services could result in upward revision
of margins for FY21E.
Valuation & Outlook
Continued strength in digital and healthy deal pipeline commentary would
act as the main growth drivers for Wipro. Additionally, room for margin
revision, healthy capital allocation policy and reasonable valuation prompt
us to recommend BUY on Wipro. Hence, we revise target price to | 315 per
share (~16x FY21E EPS).
Key Financial Summary
s
Key Financials FY17 FY18 FY19E FY20E FY21E CAGR (FY19-21E)
Net Sales 55,040 54,636 58,052 62,929 67,944 8.2%
EBITDA 11,458 10,542 11,938 13,370 14,569 10.5%
EBITDA Margins (%) 20.8 19.3 20.6 21.2 21.4
Net Profit 8,490 8,008 9,003 10,449 11,709 14.0%
EPS (|) 17.5 12.7 14.9 17.3 19.4
P/E 16.2 22.5 19.0 16.4 14.6
RoNW (%) 16.3 16.6 15.8 16.7 17.0
RoCE (%) 16.9 16.9 17.8 18.1 18.4
Source: Company, ICICI Direct Research
Particulars
Particular Amount
Market Capitalization (| Crore) 171,635.7
Total Debt (| Crore) 9,946.7
Cash and Investments (| Crore) 38,417.6
EV (| Crore) 143,164.8
52 week H/L 297 / 190
Equity capital 1,207
Face value | 2
Key Highlights
Healthy deal pipeline commentary
and digital signals healthy revenue
acceleration in next two years
Digital with growth of 31% YoY in
FY19, one of the key driver for growth
Expect IT service margins in range of
~18% as sustainable.
Revise our recommendation from
Hold to Buy with a revised target
price of | 315
Research Analyst
Devang Bhatt
Deepti Tayal
ICICI Securities | Retail Research 2
ICICI Direct Research
Result Update | Wipro Ltd
Exhibit 1: Variance Analysis EESes
Q4FY19 Q4FY19E Q4FY18 YoY (%) Q3FY19 QoQ (%) Comments
Revenue 15,006 15,043 13,769 9.0 15,060 -0.4
Revenue de-grew 0.4% QoQ on the back of rupee
appreciation and volatile IT products division which
declined 12.3% QoQ
Employee expenses 10,426 10,332 9,779 6.6 10,289 1.3
Gross Margin 4,581 4,711 3,989 14.8 4,771 -4.0
Gross margin (%) 30.5 31.3 29.0 155 bps 31.7 -115 bps
Selling & marketing costs 1,099 1,034 1,126 -2.4 1,189 -7.5
G&A expenses 667 833 980 -32.0 698 -4.4
EBITDA 3,292 3,300 2,509 31.2 3,384 -2.7
IT services EBIT margin declined 60 bps to 19.2%
mainly on account of rupee appreciation (-0.4%
impact) and salary increments to some employees
EBITDA Margin (%) 21.9 21.9 18.2 372 bps 22.5 -54 bps
Depreciation 446 451 570 -21.8 449 -0.8
EBIT 2,732 2,849 1,939 40.9 2,867 -4.7
EBIT Margin (%) 18.2 18.9 14.1 413 bps 19.0 -83 bps
Other income 470 417 324 45.0 374 25.8
PBT 3,202 3,266 2,262 41.5 3,240 -1.2
Tax paid 706 719 462 53.1 697 1.4
PAT 2,483 2,544 1,803 37.7 2,510 -1.1
Key Metrics
Closing employee Count 171,425 173,000 159,923 7.2 172,379 -0.6
TTM voluntary Attrition (%) 17.6 17.7 16.8 80 bps 17.9 -30 bps Attrition still at elevated levels
Utilisation ex trainees (%) 85.4 83.5 83.4 200 bps 83.2 220 bps
Average $/| 70.3 70.8 65.0 8.1 71.7 -1.9
Source: Company, ICICI Direct Research
Exhibit 2: Change in estimates
FY19 Comments
(| Crore) Current Old New % Change Old New % Change
Revenue 58,052 63,232 62,929 -0.5 68,267 67,944 -0.5
EBITDA 11,938 13,069 13,370 2.3 14,177 14,569 2.8
EBITDA Margin (%) 20.6 20.7 21.2 55 bps 20.8 21.4 65 bpsChange in margin estimates on the back
of revision in IT service margin estimates
PAT 9,003 10,277 10,449 1.7 11,302 11,709 3.6
EPS (|) 14.9 17.1 17.3 1.7 18.8 19.4 3.6
FY20E FY21E
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 3
ICICI Direct Research
Result Update | Wipro Ltd
Conference Call Highlights
Management guidance: Wipro guided that its Q1FY20E IT services
revenues would be in the range of $2046-2087 million, which translates
to -1.4% to 0.6% QoQ growth. However, excluding the impact of the
divestment of its Workday and Cornerstone on demand business
(concluded in Q4FY19), growth guidance translates to -1% to 1%. The
muted guidance is on account of Q1 seasonality, completion of some
large projects and delay in certain projects to the following quarters
Margins outlook: Margins in Q1FY20E are expected to be impacted by
salary increments to be done from June 1, 2019. For FY19, IT services
EBIT margin was at 18%. Going ahead, margins in a narrow band of 18%
look sustainable. However, a recovery in high margin verticals and
pressure in traditional services coming down could result in upward
revision of margins for FY21E
Healthcare: With 13.2% of revenue, the healthcare division witnessed
sequential growth of 2.1% in the quarter. Going forward, the
management said the vertical is expected to remain soft on account of
headwinds and uncertainty in the segment due to HPS weakness,
especially in H1FY20E
Other verticals: BFSI (31.5% of revenue) and consumer business unit
(16.2% of revenue) proved to be the main growth drivers among
verticals as they grew 16.1% YoY and 9.8% YoY in constant currency in
FY19. Providing colour on verticals for the next year, the management
expects continued momentum in BFSI, consumer business unit and
energy & utilities. However, growth in BFSI would moderate in FY20E
(vs. FY19) on account of some softness in capital markets segment,
Wipro’s major presence within banking. An uptick is anticipated in
communication and technology verticals while healthcare &
manufacturing are expected to be soft in H1FY20E
Digital revenues: Digital business continues to ride on upward
trajectory, constituted 34.8% of revenue (vs. 26.7% in Q4FY18) and grew
31% YoY in Q4FY19 in dollar terms
Employee details: The company's closing employee count in FY19 was
at 171,425 (vs. 159,923 in FY18). Net utilisation (ex-trainees) increased
220 bps QoQ to 85.4% and was one of the driver to keep margins in
check in the quarter. In terms of attrition rate, voluntary attrition (TTM)
declined 30 bps QoQ to 17.6%. In terms of visa concerns, Wipro has
limited onsite risk as 64% of its workforce in US are locals
Payout policy: The company intends to maintain payout policy of 45-
50% of PAT
ICICI Securities | Retail Research 4
ICICI Direct Research
Result Update | Wipro Ltd
Key Metrics
Exhibit 3: Geography-wise split up
Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19
Revenue by geography (%)
Americas 54.1 53.8 56.0 56.1 57.1 58.2
Europe 26.5 27.5 26.1 25.7 25.5 24.6
RoW 19.4 18.8 17.9 18.2 17.4 17.2
Growth QoQ (%)- Constant currency
Americas -0.7 1.6 2.9 3.7 3.7 3.1
Europe 4.7 2.7 -3.0 0.9 2.7 -3.0
RoW -0.5 -1.2 1.1 7.9 -2.3 0.3
Source: Company, ICICI Direct Research
Exhibit 4: Vertical-wise split up
Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19
Revenue by strategic business units (%)
Communications 6.5 5.9 5.7 5.8 5.8 5.7
BFSI 28.3 28.7 29.8 30.5 31.4 31.5
Manufacturing 8.8 8.9 8.4 8.3 8.1 8.0
Technology 14.3 14.6 14.5 13.9 13.0 12.6
Health Business Unit 14.3 14.2 13.6 13.0 13.1 13.2
Consumer Business Unit 15.1 15.0 15.3 15.7 15.6 16.2
Energy,Natural Resources & Utilities 12.7 12.7 12.7 12.8 13.0 12.8
Growth QoQ (%)- Constant currency
Communications -0.7 -8.1 -1.3 4.2 2.1 -1.2
BFSI 4.4 3.0 3.0 4.4 5.3 1.3
Manufacturing 0.0 2.9 -5.4 1.7 0.4 -0.7
Technology 0.0 0.0 -1.3 1.8 -4.2 -2.0
Health Business Unit 2.5 0.6 -4.7 -3.0 2.8 2.1
Consumer Business Unit 1.2 -1.0 2.6 4.8 1.4 5.3
Energy,Natural Resources & Utilities -6.1 1.6 1.7 4.0 4.6 -0.7
Source: Company, ICICI Direct Research
Exhibit 5: Exhibit 5: Service line wise break-up
Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19
Revenue by service lines (%)
Cloud Infrastructure Services 27.3 27.6 26.3 25.6 25.0 25.2
Data, Analytics & AI 7.1 7.1 7.2 7.8 7.6 7.6
Digital operations and Platforms 12.9 12.4 12.4 12.9 14.7 14.9
Industrial & Engineering Services 7.0 7.4 7.4 7.4 7.1 7.2
Modern Application Services 45.7 45.5 46.7 46.3 45.6 45.1
Growth QoQ (%)- Constant currency
Cloud Infrastructure Services 0.4 3.4 -4.6 2.6 -0.2 2.3
Data, Analytics & AI -0.4 1.7 1.5 11.1 -0.9 1.3
Digital operations and Platforms 4.7 -2.5 -0.6 6.2 16.2 2.3
Industrial & Engineering Services -0.3 7.4 -1.1 1.9 -2.0 1.7
Modern Application Services 0.6 -0.3 3.3 1.0 1.1 -0.2
Source: Company, ICICI Direct Research
Among geography, growth was led by Americas
while Europe was weak
See continued momentum in BFSI, consumer
business unit and E&U in FY20E with growth
moderation in BFSI
Uptick expected in Communication and Technology
Healthcare and Manufacturing could remain soft
specifically in H1FY20E
ICICI Securities | Retail Research 5
ICICI Direct Research
Result Update | Wipro Ltd
Exhibit 6: Client & human resource matrix
Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19
Client metrics
$1 mn Clients 599 595 595 584 578 571
$10 mn Clients 167 171 171 177 171 172
$50 mn Clients 41 39 40 39 41 41
$75 mn Clients 17 20 19 19 19 22
$100 mn Clients 9 8 8 9 10 10
Headcount, Utilization & Attrition
Closing employee count 158865 159923 160846 171451 172379 171425
Net Utilization (Excluding trainees) 81.9 83.4 85.2 85.5 83.2 85.4
Voluntary Attrition LTM 16.1 16.8 17.1 17.5 17.9 17.6
Source: Company, ICICI Direct Research
Three clients added in US$75 mn+ category taking
the count to 22
ICICI Securities | Retail Research 6
ICICI Direct Research
Result Update | Wipro Ltd
Financial story in charts
Exhibit 7: Digital grew strong at 31.2% YoY in Q4FY19
21.7 22.1 22.524.1 25.0
26.728.0
31.433.2
34.8
9.9
4.62.7
9.4
3.7
9.4
1.1
13.3
7.76.3
0.0
10.0
20.0
30.0
40.0
Q3FY17
Q4FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
%
Digital as a % of revenue Growth, QoQ
Source: Company, ICICI Direct Research
Exhibit 8: Dollar revenues may grow at 7.5% CAGR in FY19-21E
7082
7346
7704
1971
2014
2013
2062
8060
1989
2010
2047
2076
8120 8
682
9379
7.0
3.7
4.9
2.1
5.1
5.85.5
4.6
0.91.7
0.7 0.8
6.98.0
0
3
6
9
1000
4000
7000
10000
FY15
FY16
FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
FY19
FY20E
FY21E
%
$ m
illion
Dollar revenue Growth, YoY
Source: Company, ICICI Direct Research
Exhibit 9: Change in margin estimates for FY20E and FY21E
22.1
20.5
17.9
16.817.3
14.814.4
15.7
17.5
13.0
19.819.2
18.0 18.1 18.3
12
15
18
21
24
FY15
FY16
FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
FY19
FY20E
FY21E
%
EBIT margin (IT services)
Source: Company, ICICI Direct Research
Digital business continues to ride on upward
trajectory and constituted 34.8% of revenue (vs.
26.7% in Q4FY18) and grew 31% YoY in Q4FY19
ICICI Securities | Retail Research 7
ICICI Direct Research
Result Update | Wipro Ltd
Exhibit 10: PAT trend
8653 88868490
2076 2191 1937 1803
8008
21211650
2510 2483
9003
10449
11709
1000
4000
7000
10000
13000FY15
FY16
FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
FY19
FY20E
FY21E
| crore
PAT
Source: Company, ICICI Direct Research
Exhibit 11: One year forward rolling PE
0
200
400
600
800
1000
Apr-10
Oct-10
Apr-11
Oct-11
Apr-12
Oct-12
Apr-13
Oct-13
Apr-14
Oct-14
Apr-15
Oct-15
Apr-16
Oct-16
Apr-17
Oct-17
Apr-18
Oct-18
Apr-19
|
Price 24 20 16 12 8
Source: Company, ICICI Direct Research
Exhibit 12: Valuation
Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE
(| cr) (%) (|) (%) (x) (x) (%) (%)
FY17 55,040 7.4 17.5 (22.7) 16.3 13.1 16.3 16.9
FY18 54,636 (0.7) 12.7 (27.5) 22.5 14.8 16.6 16.9
FY19 58,052 6.3 14.9 18.1 19.1 12.0 15.8 17.8
FY20E 62,929 8.4 17.3 16.1 16.4 10.2 16.7 18.1
FY21E 67,944 8.0 19.4 12.1 14.7 8.9 17.0 18.4
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 8
ICICI Direct Research
Result Update | Wipro Ltd
Exhibit 13: Recommendation History vs. Consensus
0.0
20.0
40.0
60.0
80.0
100.0
0
200
400
600
800
1,000
Apr-
19
Feb-
19
Jan-
19
Nov-
18
Oct-
18
Aug-
18
Jul-
18
May-
18
Apr-
18
Feb-
18
Dec-
17
Nov-
17
Sep-
17
Aug-
17
Jun-
17
May-
17
Mar-
17
Jan-
17
Dec-
16
Oct-
16
Sep-
16
Jul-
16
Jun-
16
Apr-
16
Mar-
16
(%
)
(|)
Price Idirect target Consensus Target Mean % Consensus with HOLD
Source: Bloomberg, Company, ICICI Direct Research
Exhibit 14: Top 10 Shareholders
Rank Name Latest Filing Date % O/S Position (m) Change (m)
1 Premji (Azim Hasham) 31-Dec-18 60.4% 3,630.4 0.0
2 Azim Premji Trust 8-Mar-19 13.3% 797.9 -26.7
3 Life Insurance Corporation of India 31-Dec-18 4.3% 259.2 43.9
4 Stewart Investors 20-Dec-17 1.3% 77.1 -5.3
5 BlackRock Institutional Trust Company, N.A. 31-Mar-19 1.0% 61.9 0.6
6 The Vanguard Group, Inc. 28-Feb-19 0.6% 33.3 0.0
7 Norges Bank Investment Management (NBIM) 31-Dec-18 0.5% 29.0 2.9
8 Dimensional Fund Advisors, L.P. 28-Feb-19 0.4% 24.3 -0.4
9 Azim Premji Philanthropic Initiatives Pvt. Ltd. 31-Dec-18 0.3% 20.8 0.0
10 SBI Funds Management Pvt. Ltd. 28-Feb-19 0.3% 20.0 0.5
Source: Reuters, ICICI Direct Research
Exhibit 15: Recent Activity
Investor name Value Shares Investor name Value Shares
Life Insurance Corporation of India 156.7m 43.9m Azim Premji Trust -98.2m -26.7m
Norges Bank Investment Management (NBIM) 10.5m 2.9m T. Rowe Price International (UK) Ltd. -41.7m -12.5m
Mirae Asset Global Investments (Hong Kong) Limited 9.2m 2.7m T. Rowe Price Hong Kong Limited -22.6m -6.8m
SEB Investment Management AB 7.2m 1.8m Axis Asset Management Company Limited -14.1m -3.6m
Unigestion 6.2m 1.6m Evli Fund Management Company Ltd. -3.8m -1.1m
Buys Sells
Source: Reuters, ICICI Direct Research
Exhibit 16: Shareholding Pattern
(in %) Sep-18 Dec-18 Mar-19
Promoter 74.31 74.30 74.29
Public 25.21 25.24 25.25
Others 0.48 0.47 0.45
Total 100.00 100.01 100.00
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 9
ICICI Direct Research
Result Update | Wipro Ltd
Financial summary
Exhibit 17: Profit and loss statement | crore
FY18 FY19 FY20E FY21E
Total Revenues 54,636 58,052 62,929 67,944
Growth (%) (0.7) 6.3 8.4 8.0
COGS 38,558 41,303 43,434 46,885
Other Expenditure 5,537 6,099 6,157 6,522
EBITDA 10,542 11,938 13,370 14,569
Growth (%) (8.0) 13.2 12.0 9.0
Depreciation 2,112 1,947 2,110 2,278
Other Income 2,400 2,292 2,897 3,483
Exchange difference - - - -
Net interest expense (583) (738) (738) (738)
Pft. from associates 1 (4) (4) (4)
PBT 10,247 11,542 13,415 15,032
Growth (%) (7.1) 12.6 16.2 12.1
Tax 2,239 2,524 2,951 3,307
PAT before Minority int, 8,008 9,017 10,464 11,725
Minority int. 0 14 15 16
PAT 8,008 9,003 10,449 11,709
EPS 12.7 14.9 17.3 19.4
EPS (Growth %) (27.5) 18.1 16.1 12.1
Source: Company, ICICI Direct Research
Exhibit 18: Cash flow statement | crore
FY18 FY19 FY20E FY21E
PAT before minority int. 8,008 9,017 10,464 11,725
Depreciation 2,112 1,947 2,110 2,278
(inc)/dec in Current Assets (717) (150) 399 (1,352)
(inc)/dec in current Liabilities 623 2,867 4,750 2,043
Taxes paid (2,811) (2,515) (2,951) (3,307)
CF from operations 8,423 11,632 15,568 11,953
Other Investments 5,628 4,486 7,384 10,866
(Purchase)/Sale of Fixed Assets (2,070) (2,084) (2,391) (2,582)
CF from investing Activities 3,558 5,013 506 901
Inc / (Dec) in Equity Capital 2 0 - -
Inc / (Dec) in sec.loan Funds (1,098) (3,888) (3,888) (3,888)
Dividend & Divendend tax (854) (1,023) (6,462) (12,469)
CF from Financial Activities (12,998) (4,937) (5,439) (6,007)
Exchange rate differences 38 53 - -
Opening cash balance 5,271 4,493 15,853 26,487
Closing cash 4,493 16,252 26,487 33,335
*calculated, Source: Company, ICICI Direct Research
Exhibit 19: Balance sheet | crore
FY18 FY19 FY20E FY21E
Liabilities
Equity 905 1,207 1,207 1,207
Reserves & Surplus 47,389 55,605 61,352 67,792
Networth 48,294 56,812 62,558 68,998
Minority Interest 241 264 279 294
Debt - long term 4,527 2,837 2,837 2,837
Debt - short term 9,299 7,110 10,740 11,596
Deffered Tax Liability 306 342 342 342
Other liabilities & provisions 1,346 1,628 1,637 1,637
Source of funds 64,012 68,992 78,393 85,704
Assets
Goodwill 11,758 11,698 11,698 11,698
Intangible Assets 1,811 1,376 1,396 1,417
PPE 6,444 7,060 7,321 7,604
O.non current assets 4,102 4,740 4,740 4,740
Investments 887 815 811 807
Debtors 10,544 10,486 11,410 12,231
Cash & Cash equivalents 4,493 15,853 26,487 33,335
Investments - short term 25,033 22,565 22,565 22,565
O.current assets 10,992 8,724 7,401 7,932
Trade Payable 6,813 8,830 9,614 10,424
OCL & Provisions 5,239 5,495 5,822 6,199
Application of funds 64,012 68,992 78,393 85,704
Source: Company, ICICI Direct Research
Exhibit 20: Key ratios | crore
FY18 FY19 FY20E FY21E
Per share data (|)
EPS 12.7 14.9 17.3 19.4
BV 76.3 94.3 103.9 114.6
DPS 2.0 1.0 6.2 7.0
Operating Ratios
EBIT Margin 15.4 17.2 17.9 18.1
PAT Margin 14.7 15.5 16.6 17.2
Debtor days 70 66 66 66
Creditor days 46 56 56 56
Return Ratios (%)
RoE 16.6 15.8 16.7 17.0
RoCE 16.9 17.8 18.1 18.4
RoIC 24.4 32.7 38.4 41.2
Valuation Ratios (x)
P/E 22.5 19.1 16.4 14.7
EV / EBITDA 14.8 12.0 10.2 8.9
EV / Net Sales 2.9 2.5 2.2 1.9
Market Cap / Sales 3.1 3.0 2.7 2.5
Price to Book Value 3.7 3.0 2.7 2.5
Solvency Ratios
Debt/EBITDA 1.3 0.8 1.0 1.0
Debt / Equity 0.3 0.2 0.2 0.2
Current Ratio 1.8 1.3 1.2 1.2
Quick Ratio 1.8 1.3 1.2 1.2
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 10
ICICI Direct Research
Result Update | Wipro Ltd
Exhibit 21: ICICI Direct coverage universe (IT)
CMP M Cap
(|) TP(|) Rating (| Cr) FY18 FY19E FY20E FY18 FY19E FY20E FY18 FY19E FY20E FY18 FY19E FY20E FY18 FY19E FY20E
Cyient (INFENT) 587 675 Buy 6,857 36.0 39.1 44.1 16.9 15.6 13.8 10.9 8.5 7.7 21.4 20.6 21.2 17.3 16.9 17.2
Eclerx (ECLSER) 1,133 910 Sell 3,931 72.9 58.9 64.2 14.2 17.5 16.1 9.1 11.1 9.9 28.2 22.8 23.1 24.1 17.3 17.5
Firstsource (FIRSOU) 49 55 Buy 3,296 4.8 5.1 5.6 10.1 9.3 8.6 8.3 7.1 6.2 13.0 14.1 15.6 13.9 13.8 13.6
HCL Tech (HCLTEC) 1,094 1,090 Hold 137,478 62.6 73.0 80.1 11.7 9.5 8.2 2.6 2.2 1.9 29.0 34.4 38.2 27.4 31.9 31.4
Infosys (INFTEC) 716 805 Buy 314,663 32.3 35.4 39.5 22.4 20.4 18.3 15.2 13.8 12.3 30.9 32.9 32.9 22.5 23.7 24.4
L&T Intotech (LTINFO) 1,654 1,950 Buy 28,870 64.7 87.0 96.6 25.7 19.1 17.2 22.9 14.3 12.1 36.0 40.6 36.9 28.8 31.2 28.3
NIIT Tech (NIITEC) 1,314 1,415 Buy 7,705 45.6 67.8 76.3 27.8 18.7 16.6 13.8 10.3 8.6 19.4 24.8 24.6 15.8 20.5 20.2
Persistent (PSYS) 629 630 Hold 4,615 40.5 45.3 49.8 14.3 12.7 11.6 8.1 5.9 5.3 19.8 20.8 20.4 15.2 15.2 15.0
TCS (TCS) 2,145 2,065 Hold 775,500 67.4 83.8 88.6 30.6 24.6 23.3 22.5 18.6 16.8 37.6 43.8 43.1 29.6 34.4 34.0
Tech M (TECMAH) 806 900 Buy 71,253 42.8 48.0 55.3 18.8 16.7 14.5 14.1 9.8 8.3 21.5 22.0 22.4 20.2 19.5 19.5
Wipro (WIPRO) 285 315 Buy 171,636 12.7 14.9 17.3 22.5 19.1 16.4 14.8 12.0 10.2 16.9 17.8 18.1 16.6 15.8 16.7
EV/EBITDA (x)P/E (x)
Sector / Company
RoE (%)RoCE (%)EPS (|)
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 11
ICICI Direct Research
Result Update | Wipro Ltd
RATING RATIONALE
ICICI Direct endeavors to provide objective opinions and recommendations. ICICI Direct assigns ratings to its
stocks according to their notional target price vs. current market price and then categorizes them as Strong
Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is
defined as the analysts' valuation for a stock
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;
Pankaj Pandey Head – Research [email protected]
ICICI Direct Research Desk,
ICICI Securities Limited,
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Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
ICICI Securities | Retail Research 12
ICICI Direct Research
Result Update | Wipro Ltd
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