Outperform on Wipro, target Rs 670: IDFC Institutional Securities
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We maintain an outperformer rating on Wipro with a 12-month price target of Rs 670 ((17x FY16e EPS), implying an upside of more than 15%. Wipro's stock has underperformed the Sensex and CNX IT Index by ~24% and ~11% YTD, respectively, on the back of below-industry average growth. We believe strong deal win momentum will reflect in the improved revenue growth trajectory over FY15/ 16e as client-specific issues are behind. We build in ~12% dollar revenue CAGR (~6% over FY12-14), led by traction in IMS and key industry verticals like Healthcare/ telecom/manufacturing. At ~15x FY16e EPS, we see room for valuation re-rating driven by higher visibility on operating performance over the next 12-18 months.
We interacted with the Wipro management to get a business update and the way forward. We learnt that demand is steady with no significant change ytd. However, macro indicators, deal pipeline and decision making are better vis-à-vis eight quarters ago. Infrastructure Management Services (IMS) would continue to be the growth leader for Wipro.
Productivity gains have been a key growth driver over the last 4-5 quarters. While large multi-year deals have lower coupon rates and upfront savings for clients, pricing is steady with rationality prevailing. Packaging of deal solution is a key differentiator in large transformational deals.
Other Latest News
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At least nine people were burnt alive and 15 injured when a moving bus caught fire near Tauru in Haryana's Nuh district in the early hours of Saturday, police said.
The incident occurred around 2 am on the Kundli-Manesar-Palwal (KMP) Expressway. The bus was carrying around 60 people, all residents of Punjab's Hoshiarpur and Ludhiana, who were returning from pilgrim towns of Mathura and Vrindavan. All of them are relatives, police said.
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Softbank-backed OYO is set to refile its much-awaited IPO as the global travel tech player is close to finalising its refinancing plans to raise up to $450 million via sale of dollar bonds, sources said.
JP Morgan is the likely lead banker for the refinancing through the sale of dollar bonds at an estimated interest rate of 9 to 10 per cent per annum, a source said.
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The national capital on Saturday morning recorded a minimum temperature of 27.1 degrees Celsius, 0.6 notch above the season's average, according to the India Meteorological Department (IMD).
On Friday, Delhi witnessed 47.4 degrees Celsius in Najafgarh, making it the hottest place in the country.
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Shareholders in Nestle India have rejected a company proposal to increase royalty payments to its Swiss parent Nestle, the company said late on Friday.
The motion called for the royalty paid to its parent to climb to 5.25 per cent of net sales, net of taxes, compared to the current level of 4.5 per cent. The increase was proposed at a rate of 0.15 per cent per annum.
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Shares of Zee Entertainment soared up to 5.2 per cent at Rs 141.65 per share on the BSE in Saturday’s intraday trade. The hike in the stock prices came after the company delivered a turnaround in quarterly growth for the January-March quarter of fiscal year 2023-24 (Q4FY24).
In the March quarter, the company reported a consolidated net profit of Rs 13.35 crore, marking a reversal from a consolidated net loss of Rs 196.03 crore in the same period of the previous fiscal year.
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