Views on Wipro Limited 1QFY2017 Results: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research- IT, Angel Broking) on Wipro Limited 1QFY2017 Results:

Wipro (CMP: INR 549 / TP: Under Review / Upside:)

"For 1QFY2017 the company posted results below expectations on the net profit front. The company posted a 2.6% sequential growth in USD IT services revenues to end the period at US$1,930.8mn V/s US$1,925mn expectations. This is against the guidance of US$1,912-1,950mn (in terms of the actual currency realized).In rupee terms, the consolidated revenues came in at INR 13,599cr V/s INR 14,154cr expected. On Constant currency terms, the company posted a 2.2% QoQ growth.

In terms of the geography, the growth was driven by the USA, which contributed around 53.5% of sales V/s 52.7% in 4QFY2016. In terms of Industries, the growth was lead by Healthcare, Life Sciences & Services, which were around 15.3% of sales V/s 12.0% in 4QFY2016. Energy, Natural Resources & Utilities, a key domain of the company was at 13.2% of sales V/s 14.6% of sales in 4QFY2016. Finance Solutions and Manufacturing & Technology, also posted a dip in sales ( 25.6% of sales in 1QFY2017 V/s 26.3% of sales in 4QFY2016 in manufacturing and 22.5% in 1QFY2017 V/s 23.2% of sales in 4QFY2016 respectively). On the operating front, EBIT margins came in at 16.1% V/s 17.1% as expected, a QoQ dip of 210bps. Consequently, the PAT came in at INR 2,059cr V/s INR 2,174cr, QoQ de-growth of 7.9%.

On operating matrix, the company's gross utilization was at 69.9% V/s 68.8% in 4QFY2016, while attrition (annualized) was 17.9% V/s 16.1% in 4QFY2016. In terms of client addition, the company added only 50 clients, which were mainly in US$20mn and below. Also the Top 10 clients continue to be under pressure. The company has given a guidance of US$ 1,901-1,939, QoQ growth of (1.5) %-0.4%. We maintain our BUY rating on the stock with a price target to be revised later."

Shares of WIPRO LTD. was last trading in BSE at Rs.546 as compared to the previous close of Rs. 553.3. The total number of shares traded during the day was 51595 in over 1397 trades.

The stock hit an intraday high of Rs. 552.15 and intraday low of 543. The net turnover during the day was Rs. 28170866.

Source : Equity Bulls

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