Wipro Ltd - Strong margin performance yet again - Emkay

Reco: ACCUMULATE
CMP: Rs 586
Target Price: Rs 615

- 2.5% QoQ US$ revenue growth within co's guided range however positive surprise on margins continues (IT Services EBIT margins at 24.5%, highest since June'10 quarter)

- Improvement in client metrics with decent growth in both US and Europe. Amongst verticals, BFSI, Telecom and Energy and Utilities grow higher than company average

- June'14 quarter revenue guidance a tad light on expectations at 0-2% QoQ growth driven by seasonal weakness and drag from Retail segment

- FY15/16E EPS remain unchanged at ~Rs 38/41 as higher margin assumptions negate a slight cut in US$ revenue estimates. Stock could reverse recent out performance near term , however positive thesis on Wipro remains unchanged

Source : Equity Bulls

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