Wipro - Struggle Continues, retain REDUCE - Emkay

- June'12 performance misses modest exp- 1.4% QoQ US$ rev growth, IT Svcs EBIT margins +30 bps QoQ to 21% despite ~11% currency depreciation and partial hit from wage hikes

- Vol growth continues to lag peers at 0.8% QoQ. US and Fin Svcs drag with a 2% QoQ decline. 4.6%/3.1% QoQ growth in rev from top 5/10 clients remains the sole positive takeaway

- Sep'12 revenue guidance remains uninspiring at 0.3-2.3% QoQ US$ revenue growth. Company has implemented a 8% offshore hike from June'12 onwards

- Moderate estimates (build in a 6/10% rev growth for FY13/14 V/s 13%/11% earlier) driving a 1.5/5% cut in EPS to Rs 25.8/27.4. REDUCE stays with a revised TP of Rs 345.

Source : Equity Bulls

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