Wipro - Q3FY14 Result Update - Microsec

Wipro Ltd (Wipro) announced its Q3 FY2014 results on 17 January 2014. Both the company's top line and net income came in line with Bloomberg Consensus Estimates.

While Wipro's top line increased 3.1% sequentially to Rs. 11,327.4 Crores, its bottom line expanded 4.3% q-o-q to Rs. 2,014.7 Crores. Growth in the company's healthy performance was mainly driven by a strong performance by its IT Services business. Wipro reported 2.6% sequential increase in IT Services revenues to Rs. 10,327.4 Crores. In $ terms, the segment's revenues grew 2.9% q-o-q to $1,678.4 Mn, which was in line with its guidance. Furthermore, led by investment in production and automation, Wipro reported 54 basis points sequential improvement in IT Services business operating margins to 23.0%. Consequently, the company registered 4.3% q-o-q increase in its Q3 FY2014 bottom line. Wipro also completed the acquisition of Opus CMC, during the quarter.

Going forward, Wipro expects its IT Services revenues, including Opus CMC, to range between $1,712 Mn and $1,745 Mn in the upcoming quarter, implying a q-o-q growth of ~2-4%. On organic basis, this may result in sequential increase of ~1.3-3.3% for Q4 FY2014E. Although the company's performance remained below its peers HCL Tech and TCS, it outperformed INFY. Furthermore, the consistent volume growth territory and management's positive outlook may pose some buying interest in the stock in medium term.

Source : Equity Bulls

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