MOSL: WIPRO (Neutral)-Improving gradually on revenues, steadfastly on margins
WIPRO: Improving gradually on revenues, steadfastly on margins
(WPRO IN, Mkt Cap USD22b, CMP INR346, TP INR385, 11% Upside, Neutral)
- Margin recovery even after one-offs was a positive: WPRO's 3QFY19 CC revenue growth of 2.4% QoQ (+7% YoY) was in line with our estimate of +2.2%. Overall EBIT margin expanded 170bp QoQ/YoY to 18.4%, the highest in 13 quarters. This was aided by a 140bp QoQ improvement in the adjusted IT Services margin to 19.8%. PAT grew 11.3% QoQ (+12.9% YoY) to INR25.4b (3% beat). For 9MFY19, WPRO revenues are up 4.2% in constant currency terms, EBITDA is up 4% and PAT is up 2.2% YoY.
- E&U adds to BFSI and Consumer traction: Sequential growth was led by BFSI (5.3% QoQ CC), which had impact from full-quarter revenue of the Alight deal (~1pp+ contribution to overall growth). All verticals grew barring Technology, which reeled under the impact of seasonality. On a YoY basis, E&U added to BFSI and Consumer as drivers of growth (10-17.5% YoY CC).
- 4Q guidance factors in macro uncertainty: For 4QFY19, WPRO guided for QoQ CC revenue growth of 0-2%, in line with our expectation of +1.1%. While there is no change in demand trends, WPRO's guidance factors potential impact from the ongoing macro uncertainties in the US and Europe.
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.