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Wipro - 2QFY2018 Result Update - Angel Broking
Posted On : 2017-11-01 20:12:49( TIMEZONE : IST )
For 2QFY2018, Wipro posted results below expectations on sales front (Constant Currency CC terms), while EBIT and net profit was higher than expected. In US$ terms, it posted a 2.1% qoq sequential growth in USD revenues to US$2,013mn v/s. US$2,015mn expected. On CC terms, the company posted a 0.3% qoq sales growth. In Rupee terms, revenues came in at Rs. 13,423cr, down 1.5% qoq. For 3QFY2018, the company has guided for sales of US$ 2,014-2,054mn.EBIT margins came in at 16.8% v/s. 15.9% expected, expansion of 85bps qoq. Consequently, PAT came in at Rs. 2,191cr v/s. Rs. 2,084cr expected, a qoq rise of 5.5%. We maintain our Neutral rating.
Quarterly highlights: In US$ terms, it posted a 2.1% qoq sequential growth in USD revenues to US$2,013mn v/s. US$2,015mn expected. On CC terms, the company posted a 0.3% qoq sales growth. For 3QFY2018, the company has guided for sales of US$ 2,014-2,054mn. In terms, of geography USA posted a CC qoq dip of 0.1%, Europe posted a CC growth of 1.3% qoq and APAC and Other Emerging Markets posted a CC qoq growth of 3.4%. In terms of operational efficiency, the gross utilization was 72.9% v/s. 72.0% in 2QFY2018.
In terms of attrition, the rate was 15.7% v/s. 15.9% in 1QFY2018. EBIT margins came in at 16.8% v/s. 15.9% expected, expansion of 85bps qoq. Consequently, PAT came in at Rs. 2,191cr v/s. Rs. 2,084cr expected, a qoq rise of 5.5%.
Outlook and valuation: The management has set a target of US$15bn of revenue and an EBIT margin of 23% by 2020. However, the near term guidance target appears to be disappointing. Nevertheless, we project a moderate top-line and net profit growth for FY2017-19E. However, given the valuations, we maintain our Neutral rating.
Shares of WIPRO LTD. was last trading in BSE at Rs.293.1 as compared to the previous close of Rs. 294. The total number of shares traded during the day was 204275 in over 1265 trades.
The stock hit an intraday high of Rs. 295.35 and intraday low of 292.65. The net turnover during the day was Rs. 60096930.
