MOSL: WIPRO (Neutral)-In-line-Healthcare comeback offset by Energy weakness
Wipro: In-line; Healthcare comeback offset by Energy weakness
(wpro IN, Mkt Cap USD25.1b, CMP INR329, TP INR300, 9% Downside, Neutral)
- In-line operationally, Healthcare turns the corner: WPRO’s 3QFY18 CC revenue growth of 0.9% QoQ (est. of +1%) and 3% YoY was in line with our estimate and at the midpoint of its guided band of 0-2%. While BFSI (+3.3% QoQ CC and +18% YoY CC) drove growth, Healthcare turned the corner (+2% QoQ CC) after three quarters of sequential decline. However, Healthcare recovery was offset by weakening in E&U (-6.1% QoQ CC). Normalized IT Services EBIT margin shrunk 10bp QoQ to 17.2% (in-line). Overall EBIT margin was lower by 10bp QoQ at 16.7% (in-line). Adjusted PAT increased 2.9% QoQ to INR22.5b, ahead of our estimate of INR21.6b (-1.6% QoQ), primarily on account of a lower ETR.
- Guidance of 1-3% QoQ CC growth in 4Q: For 4QFY18, WPRO guided for revenue of USD2033-2073m, implying CC growth of 1-3% QoQ and 2.5-4.6% YoY. The guidance embeds “meaningful” revenue impact from insolvency of a customer, whereby it also took ~USD50m one-time provision on the costs this quarter.
- Confident of its Digital prowess: Like other peers, WPRO too cited trends of increasing deal sizes in Digital. Digital grew >4% QoQ, now constituting 25% of revenue. WPRO reiterated its prowess in Digital, where it is pegged as a leader in 19 reports by industry analysts. Its customer satisfaction scores are also up 410bp YoY. Its traction in BFS and Consumer are being driven by Digital forays.
Wipro is an information technology group based in India. Co. is engaged in the provision of information technology services. Co. is active as a global IT services company that provides a range of IT services, software solutions, IT consulting, business process outsourcing, or BPO, services and research and development services in the areas of hardware and software design to companies worldwide. Co. also provides outsourced research and development, infrastructure outsourcing and business consulting services. Co.operations are organized along two business segments: IT Services and IT Products.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.