wipro ltdoctober 16, 2019content.icicidirect.com/mailimages/idirect_wipro_q2fy20.pdfwipro ltd wipro)...

ICIC

I S

ecurit

ies –

Retail E

quit

y R

esearch

Result

Update

October 16, 2019

CMP: | 250 Target: | 300 (20%) Target Period: 12 months

Wipro Ltd (WIPRO)

BUY

Good performance on all fronts…

Wipro reported a healthy performance for the quarter with in line revenue,

surprise at the margin level and decent guidance range (0.8-2.8%) for Q3.

Further, digital (39.6% of revenue) grew a healthy 6.4% QoQ, 28.6% YoY in

the quarter. Another key highlight is the decline in voluntary attrition to 17%

(vs. 17.6% in Q1).

On path towards higher revenue growth trajectory

Similar to TCS and Infosys, the Wipro management also has a cautious

stance on the trajectory of the banking and financial services segment due

to weakness in the capital markets space and European banking. Further, a

delay in both digital projects renewal and ramp up of new projects in top

client could impact banking growth for Wipro in the near term. However,

besides this, the outlook for major verticals was positive with retail,

healthcare (outside HPS), energy & utilities and global communication

looking healthy based on the deal pipeline. The qualitative commentary

suggests the momentum in order book is better compared to Q1. Taking this

into consideration and two deals getting consolidated in Q3, the

management has guided that its Q3FY20E IT services revenue growth would

be in the range of 0.8-2.8% (we expect organic growth of 0-2%). The

guidance looks good for a seasonally weak quarter. This, along with digital

acceleration, pick-up in execution and steady stabilisation of traditional

business would bode well for accelerated revenue growth in FY19-21E.

Good execution on margin front, expect improvement in H2

IT services EBIT margin surprised positively with 10 bps expansion QoQ at

18.1% (vs. our expectation of 17.3%). Despite a two month wage hike

impact, higher onsite mix and net utilisation (ex-trainees) declining sharply

by 290 bps, the main reason for margin improvement was the cost

optimisation. SG&A cost was at a multi-quarter low on the back of lower

provisions for bad debt and lower marketing spends. Though this cost is

expected to normalise in H2FY20E, we expect margins to witness an

improving trajectory in the next two quarters led by utilisation of employees

(healthy net addition of ~10000 in H1), automation and improved execution.

Valuation & Outlook

In-line revenue, margin surprise and good guidance for a seasonally weak

quarter were key highlights. Coupled with digital acceleration, pick-up in

execution, commentary on deal front and steady stabilisation of traditional

business is expected to lead to an improved growth trajectory in next two

years. Further, a reduction in tax estimates for FY20E, FY21E led to revision

in PAT estimates. This, along with reasonable valuation (~12x FY21E EPS)

prompts us to maintain BUY on Wipro with a target price of | 300/share.

Key Financial Summary

s

Key Financials FY17 FY18 FY19 FY20E FY21E CAGR (FY19-21E)

Net Sales 55,040 54,636 58,052 61,301 66,202 6.8%

EBITDA 11,458 10,542 11,938 12,615 14,918 11.8%

Net Profit 8,490 8,008 9,003 9,813 11,665 13.8%

EPS (|) 17.5 12.7 14.9 17.2 20.5

P/E 14.2 19.7 16.7 14.5 12.2

RoNW (%) 16.3 16.6 15.8 18.0 19.1

RoCE (%) 16.9 16.9 17.8 18.7 20.0

Source: Company, ICICI Direct Research

Particulars

Particular Amount

Market Capitalization (| Crore) 150,557.6

Total Debt (| Crore) 9,946.7

Cash and Investments (| Crore) 38,417.6

EV (| Crore) 122,086.7

52 week H/L 301/ 220

Equity capital 1,207

Face value | 2

Key Highlights

With improving qualitative

commentary on deal front and digital

growth, we expect growth to

accelerate in next two years with

room for margin revision upwards

from 18.3% estimated in FY21E

Digital going strong with 29% YoY

growth in Q2FY20, now constitutes

39.6% of revenues

Maintain BUY with a target price of |

300

Research Analyst

Devang Bhatt

[email protected]

Deepti Tayal

[email protected]

ICICI Securities | Retail Research 2

ICICI Direct Research

Result Update | Wipro Ltd

Exhibit 1: Variance Analysis EESes

Q2FY20 Q2FY20E Q2FY19 YoY (%) Q1FY20 QoQ (%) Comments

Revenue 15,126 14,943 14,302 5.8 14,716 2.8Revenue growth mainly due to execution of large

projects mainly in consumer business segment

Employee expenses 10,801 10,618 10,177 6.1 10,427 3.6

Gross Margin 4,325 4,325 4,125 4.9 4,289 0.8

Gross margin (%) 28.6 28.9 28.8 -25 bps 29.1 -55 bps

Selling & marketing costs 1,063 1,111 1,081 -1.7 1,095 -3.0

G&A expenses 653 821 1,370 -52.3 812 -19.6

EBITDA 3,155 2,955 2,260 39.6 3,033 4.0

EBITDA Margin (%) 20.9 19.8 15.8 506 bps 20.6 25 bps

Depreciation 481 493 437 10.1 496 -2.9

EBIT 2,674 2,462 1,823 46.7 2,537 5.4

EBIT Margin (%) 17.7 16.5 12.7 493 bps 17.2 43 bpsIT services EBIT margin expanded 10 bps to 18.1%

mainly on account of cost optimisation measures

Other income 461 553 357 29.2 536 -14.0

PBT 3,135 3,015 2,179 43.8 3,074 2.0

Tax paid 573 663 535 7.2 670 -14.4

PAT 2,553 2,336 1,650 54.7 2,387 6.9

Key Metrics

Closing employee Count 181,453 179,850 171,451 5.8 174,850 3.8 Onboarded 3200 freshers this quarter

TTM voluntary Attrition (%) 17.0 17.7 17.5 -50 bps 17.6 -60 bps

Utilisation ex trainees (%) 82.1 85.5 85.5 -340 bps 85.0 -290 bps

Average $/| 71.5 70.8 70.4 1.7 70.4 1.6


Exhibit 2: Change in estimates

FY19 Comments

(| Crore) Old New % Change Old New % Change

Revenue 58,052 61,672 61,301 -0.6 66,763 66,202 -0.8

EBITDA 11,938 12,695 12,615 -0.6 15,040 14,918 -0.8

EBITDA Margin (%) 20.6 20.6 20.6 -1 bps 22.5 22.5 1 bps Keep our margin estimates intact

PAT 9,003 9,896 9,813 -0.8 12,018 11,665 -2.9

EPS (|) 14.9 17.4 17.2 -0.8 21.1 20.5 -2.9

Revision in EPS estimates for FY20E and

FY21E due to reduction in tax estimates

and incorporation of buyback in FY20

numbers

FY20E FY21E





Conference Call Highlights

Management guidance: Wipro has guided that its Q3FY20E IT services

revenues would be in the range of $2065 -2106 million, which translates

to 0.8-2.8% QoQ growth. Taking into account two deals getting

consolidated in Q3, organic growth guidance works out in the range of

0-2%

Margin walkthrough: IT services EBIT margin expanded 10 bps QoQ to

18.1% but declined 40 bps in reported terms from 18.5% in Q1FY20. The

margin breakup is as: investment in people including two month wage

hike impact (-110 bps), one time other operating income in Q1 (-50 bps)

partially countered by cost optimisation driven by lower SG&A (+120

bps). Going ahead, margins in a narrow band of 18% look sustainable

Other verticals: This quarter saw a mixed bag performance from a

vertical perspective. While consumer business unit, energy & utilities

and manufacturing grew healthy on a CC basis, financial services,

communications and healthcare reported a muted show. Citing the

vertical outlook, the management indicated 1) Weakness in banking

segment due to continued softness in capital markets and completion of

large transformation projects. They expect the segment to be soft in the

next quarter also, 2) uptick in demand and good deal pipeline outside

HPS in healthcare. However, de-growth in HPS is largely arrested, 3)

weakness in communication on the back of volatility in India

communication business, 4) restructuring still going on in manufacturing

and could take a couple of quarters to turn around, 5) consumer

business grew on the back of execution of deals. The company is not

facing heat in retail segment (as seen by others) due to a different set of

client mix

Digital revenues: Digital business continues to ride on an upward

trajectory, comprising 39.6% of revenue (vs. 31.4% in Q2FY19) and

grew 28.6% YoY in dollar terms. The management said it is investing in

areas of digital, cloud, engineering and cyber security to up the

capability bar

Employee details: The company's closing employee count was at

181,453 with onboarding of over 3200 freshers this quarter. Net

utilisation (ex-trainees) declined sharply by 290 bps QoQ to 82.1% due

to fresher hiring and people on bench due to anticipation of certain

projects getting ramped up. Key positive highlight of the quarter was the

dip in voluntary attrition (TTM), which dipped 50 bps QoQ to 17.0%. In

terms of visa concerns, Wipro has limited onsite risk as 67.8% of its

workforce in US are locals

Client update: Five clients were added in US$1 million+ bucket taking

the count to 569. Top client (is from banking space), which constitute

3.2% of revenues dragged 13.1% on a QoQ basis due to a delay in both

projects renewal and ramp up of new projects (especially in digital) with

the client. Digital is always short-term projects, which may pick up pace

post two quarters. Out of the top clients, 50% is in BFSI

Buyback: The company has completed share buyback of | 10,500 crore

in Q2




Key Metrics

Exhibit 3: Geography-wise split up

Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20

Revenue by geography (%)

Americas 56.0 56.1 57.1 58.2 58.7 59.6

Europe 26.1 25.7 25.5 24.6 24.6 23.5

RoW 17.9 18.2 17.4 17.2 16.7 16.9

Growth QoQ (%)- Constant currency

Americas 2.9 3.7 3.7 3.1 0.2 2.1

Europe -3.0 0.9 2.7 -3.0 -0.4 -1.9

RoW 1.1 7.9 -2.3 0.3 -4.3 2.1


Exhibit 4: Vertical-wise break-up


Revenue by strategic business units (%)

Communications 5.7 5.8 5.8 5.7 5.9 5.7

BFSI 29.8 30.5 31.4 31.5 31.6 31.3

Manufacturing 8.4 8.3 8.1 8.0 7.9 8.1

Technology 14.5 13.9 13.0 12.6 13.0 13.0

Health Business Unit 13.6 13.0 13.1 13.2 13.2 13.0

Consumer Business Unit 15.3 15.7 15.6 16.2 15.6 16.0

Energy,Natural Resources & Utilities 12.7 12.8 13.0 12.8 12.8 12.9


Communications -1.3 4.2 2.1 -1.2 2.8 -2.4

BFSI 3.0 4.4 5.3 1.3 -0.6 -0.1

Manufacturing -5.4 1.7 0.4 -0.7 -2.0 3.3

Technology -1.3 1.8 -4.2 -2.0 2.7 1.3

Health Business Unit -4.7 -3.0 2.8 2.1 -1.5 -0.6

Consumer Business Unit 2.6 4.8 1.4 5.3 -4.4 4.1

Energy,Natural Resources & Utilities 1.7 4.0 4.6 -0.7 0.2 2.3


Exhibit 5: Service line wise break-up


Revenue by service lines (%)

Cloud Infrastructure Services 26.3 25.6 25.0 25.2 25.7 25.7

Data, Analytics & AI 7.2 7.8 7.6 7.2 7.4 7.3

Digital operations and Platforms 12.4 12.9 14.7 14.9 14.7 14.7

Industrial & Engineering Services 7.4 7.4 7.1 7.6 7.6 7.5

Modern Application Services 46.7 46.3 45.6 45.1 44.6 44.8


Cloud Infrastructure Services -4.6 2.6 -0.2 2.3 0.5 1.1

Data, Analytics & AI 1.5 11.1 -0.9 1.3 0.8 -0.2

Digital operations and Platforms -0.6 6.2 16.2 2.3 -2.9 1.2

Industrial & Engineering Services -1.1 1.9 -2.0 1.7 -0.9 0.4

Modern Application Services 3.3 1.0 1.1 -0.2 -0.9 1.3


De-growth in Europe due to uncertainty around

Brexit and weakness in capital markets

Weakness in BFSI mainly due to softness in capital

markets and completion of large transformational

projects in top clients. The management expects

this softness to persist in the next quarter as well

Good quarter in consumer business unit driven by

execution of deals

Communication weak due to volatility in India while

global communication segment doing well




Exhibit 6: Client & human resource matrix


Client metrics

$1 mn Clients 595 584 578 571 564 569

$10 mn Clients 171 177 171 172 166 165

$50 mn Clients 40 39 41 41 41 41

$75 mn Clients 19 19 19 22 23 23

$100 mn Clients 8 9 10 10 13 13

Headcount, Utilization & Attrition

Closing employee count 160846 171451 172379 171425 174850 181453

Net Utilization (Excluding trainees) 85.2 85.5 83.2 85.4 85.0 82.1

Voluntary Attrition LTM 17.1 17.5 17.9 17.6 17.6 17.0


Five clients added in US$1 million+ category taking

the count to 569




Financial story in charts

Exhibit 7: Digital grows at 28.6% YoY in Q2FY20

21.7 22.1 22.524.1 25.0

26.728.0

31.433.2

34.837.4

39.6

9.9

4.62.7

9.4

3.7

9.4

1.1

13.3

7.76.3 5.6 6.4

0.0

10.0

20.0

30.0

40.0

50.0

Q3FY17

Q4FY17

Q1FY18

Q2FY18

Q3FY18

Q4FY18

Q1FY19

Q2FY19

Q3FY19

Q4FY19

Q1FY20

Q2FY20

%

Digital as a % of revenue Growth, QoQ


Exhibit 8: Dollar revenues may grow at 5% CAGR in FY19-21E

7082

7346

7704

8060

1989

2010

2047

2076

8120

2039

2049

8301

8946

7.0

3.7

4.94.6

0.91.7

0.7 0.8

2.5

2.02.2

7.8

0

3

6

9

1000

4000

7000

10000

FY15

FY16

FY17

FY18

Q1FY19

Q2FY19

Q3FY19

Q4FY19

FY19

Q1FY20

Q2FY20

FY20E

FY21E

%

$ m

illion

Dollar revenue Growth, YoY


Exhibit 9: Maintain our margin estimates for FY20E and FY21E

22.1

20.5

17.9

15.7

17.5

13.0

19.8

18.2 18.0 18.0 18.1 18.1 18.3

12

15

18

21

24

FY15

FY16

FY17

FY18

Q1FY19

Q2FY19

Q3FY19

Q4FY19

FY19

Q1FY20

Q2FY20

FY20E

FY21E

%

EBIT margin (IT services)


Digital business continues to ride on upward

trajectory and constituted 39.6% of revenue (vs.

31.4% in Q2FY19) and grew 29% YoY in the quarter




Exhibit 10: PAT trend

8653 88868490

8008

21211650

2510 2483

9003

2387 2553

9813

11665

1000

4000

7000

10000

13000FY15

FY16

FY17

FY18

Q1FY19

Q2FY19

Q3FY19

Q4FY19

FY19

Q1FY20

Q2FY20

FY20E

FY21E

| crore

PAT


Exhibit 11: One year forward rolling PE

0

200

400

600

800

1000

Oct-10

Apr-11

Oct-11

Apr-12

Oct-12

Apr-13

Oct-13

Apr-14

Oct-14

Apr-15

Oct-15

Apr-16

Oct-16

Apr-17

Oct-17

Apr-18

Oct-18

Apr-19

Oct-19

|

Price 24 20 16 12 8


Exhibit 12: Valuation

Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE

(| cr) (%) (|) (%) (x) (x) (%) (%)

FY17 55,040 7.4 17.5 (22.7) 14.3 11.3 16.3 16.9

FY18 54,636 (0.7) 12.7 (27.5) 19.8 12.8 16.6 16.9

FY19 58,052 6.3 14.9 18.1 16.7 10.2 15.8 17.8

FY20E 61,301 5.6 17.2 15.2 14.5 9.9 18.0 18.7

FY21E 66,202 8.0 20.5 18.9 12.2 7.9 19.1 20.0





Exhibit 13: Recommendation History vs. Consensus

0.0

20.0

40.0

60.0

80.0

100.0

0

200

400

600

800

Oct-

19

Aug-

19

Jul-

19

May-

19

Apr-

19

Feb-

19

Jan-

19

Nov-

18

Sep-

18

Aug-

18

Jun-

18

May-

18

Mar-

18

Feb-

18

Dec-

17

Nov-

17

Sep-

17

Jul-

17

Jun-

17

Apr-

17

Mar-

17

Jan-

17

Dec-

16

Oct-

16

Sep-

16

(%

)

(|)

Price Idirect target Consensus Target Mean % Consensus with SELL

Source: Bloomberg, Company, ICICI Direct Research

Exhibit 14: Top 10 Shareholders

Rank Name Latest Filing Date % O/S Position (m) Change (m)

1 Premji (Azim Hasham) 9-Sep-19 60.6% 3,446.3 -184.1

2 Azim Premji Trust 9-Sep-19 13.3% 757.4 -40.6

3 Life Insurance Corporation of India 9-Sep-19 4.9% 276.8 -13.5

4 BlackRock Institutional Trust Company, N.A. 30-Sep-19 0.7% 42.0 -0.9

5 The Vanguard Group, Inc. 31-Aug-19 0.6% 33.3 0.6

6 ICICI Prudential Asset Management Co. Ltd. 30-Sep-19 0.5% 29.8 0.2

7 Norges Bank Investment Management (NBIM) 31-Dec-18 0.5% 29.0 2.9

8 Dimensional Fund Advisors, L.P. 30-Sep-19 0.4% 21.4 0.1

9 SBI Funds Management Pvt. Ltd. 31-Aug-19 0.4% 20.0 0.3

10 Azim Premji Philanthropic Initiatives Pvt. Ltd. 9-Sep-19 0.3% 19.8 -1.1

Source: Reuters, ICICI Direct Research

Exhibit 15: Recent Activity

Investor name Value Shares Investor name Value Shares

Pramerica SGR S.p.A. 4.5m 1.1m Premji (Azim Hasham) -619.4m -184.1m

Goldman Sachs Asset Management International 2.4m 0.7m Azim Premji Trust -139.8m -40.6m

The Vanguard Group, Inc. 2.0m 0.6m Life Insurance Corporation of India -45.3m -13.5m

Callan LLC 2.1m 0.5m Tredje AP Fonden -10.7m -2.6m

Voya Investment Management LLC 1.9m 0.5m Schroder Investment Management (Hong Kong) Ltd. -6.3m -1.5m

Buys Sells

Source: Reuters, ICICI Direct Research

Exhibit 16: Shareholding Pattern

(in %) Dec-18 Mar-19 Sep-19

Promoter 74.30 73.85 74.04

Public 25.24 25.70 25.52

Others 0.47 0.45 0.43

Total 100.01 100.00 100.00





Financial summary

Exhibit 17: Profit and loss statement | crore

FY18 FY19 FY20E FY21E

Total Revenues 54,636 58,052 61,301 66,202

Growth (%) (0.7) 6.3 5.6 8.0

COGS 38,558 41,303 42,722 45,083

Other Expenditure 5,537 6,099 5,996 6,233

EBITDA 10,542 11,938 12,615 14,918

Growth (%) (8.0) 13.2 5.7 18.3

Depreciation 2,112 1,947 2,056 2,220

Other Income 2,400 2,292 2,544 2,829

Exchange difference - - - -

Net interest expense (583) (738) (738) (738)

Pft. from associates 1 (4) (4) (4)

PBT 10,247 11,542 12,362 14,786

Growth (%) (7.1) 12.6 7.1 19.6

Tax 2,239 2,524 2,534 3,105

PAT before Minority int, 8,008 9,017 9,827 11,681

Minority int. 0 14 15 16

PAT 8,008 9,003 9,813 11,665

EPS 12.7 14.9 17.2 20.5

EPS (Growth %) (27.5) 18.1 15.2 18.9


Exhibit 18: Cash flow statement | crore


PAT before minority int. 8,008 9,017 9,827 11,681

Depreciation 2,112 1,947 2,056 2,220

(inc)/dec in Current Assets (717) (150) (1,482) (135)

(inc)/dec in current Liabilities 623 2,867 3,982 2,436

Taxes paid (2,811) (2,515) (2,534) (3,105)

CF from operations 8,423 11,632 12,581 14,114

Other Investments 5,628 4,486 2,544 2,829

(Purchase)/Sale of Fixed Assets (2,070) (2,084) (2,329) (2,516)

CF from investing Activities 3,558 5,013 214 314

Inc / (Dec) in Equity Capital 2 0 - -

Inc / (Dec) in sec.loan Funds (1,098) (3,888) - -

Dividend + Buyback (11,886) (1,023) (12,709) (5,987)

CF from Financial Activities (12,998) (4,937) (12,709) (5,987)

Exchange rate differences 38 53 - -

Opening cash balance 5,271 4,493 15,853 15,939

Closing cash 4,493 15,853 15,939 24,380


Exhibit 19: Balance sheet | crore


Liabilities

Equity 905 1,207 1,140 1,140

Reserves & Surplus 47,389 55,605 53,513 59,929

Networth 48,294 56,812 54,653 61,069

Minority Interest 241 264 279 294

Debt - long term 4,527 2,837 2,837 2,837

Debt - short term 9,299 7,110 10,462 11,298

Deffered Tax Liability 306 342 342 342

Other liabilities & provisions 1,346 1,628 1,637 1,637

Source of funds 64,012 68,992 70,209 77,477

Assets

Goodwill 11,758 11,698 11,698 11,698

Intangible Assets 1,811 1,376 1,395 1,416

PPE 6,444 7,060 7,315 7,590

O.non current assets 4,102 4,740 4,740 4,740

Investments 887 815 811 807

Debtors 10,544 10,486 11,011 12,024

Cash & Cash equivalents 4,493 15,853 15,939 24,380

Investments - short term 25,033 22,565 22,565 22,565

O.current assets 10,992 8,724 9,681 8,803

Trade Payable 6,813 8,830 9,429 10,210

OCL & Provisions 5,239 5,495 5,517 6,335

Application of funds 64,012 68,992 70,209 77,477


Exhibit 20: Key ratios | crore


Per share data (|)

EPS 12.7 14.9 17.2 20.5

BV 76.3 94.3 95.9 107.2

DPS 2.0 1.0 2.1 7.4

Operating Ratios

EBIT Margin 15.4 17.2 17.2 19.2

PAT Margin 14.7 15.5 16.0 17.6

Debtor days 70 66 66 66

Creditor days 46 56 56 56

Return Ratios (%)

RoE 16.6 15.8 18.0 19.1

RoCE 16.9 17.8 18.7 20.0

RoIC 24.4 32.7 33.3 41.6

Valuation Ratios (x)

P/E 19.8 16.7 14.5 12.2

EV / EBITDA 12.8 10.2 9.9 7.9

EV / Net Sales 2.5 2.1 2.0 1.8

Market Cap / Sales 2.8 2.6 2.5 2.3

Price to Book Value 3.3 2.6 2.6 2.3

Solvency Ratios

Debt/EBITDA 1.3 0.8 1.1 0.9

Debt / Equity 0.3 0.2 0.2 0.2

Current Ratio 1.8 1.3 1.4 1.3

Quick Ratio 1.8 1.3 1.4 1.3





Exhibit 21: ICICI Direct coverage universe (IT)

CMP M Cap

(|) TP(|) Rating (| Cr) FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E

HCL Tech (HCLTEC) 1,091 1,150 Hold 143,444 74.7 73.7 83.7 14.2 14.4 12.6 9.8 8.8 7.6 26.5 25.7 26.4 24.5 21.7 22.0

Infosys (INFTEC) 773 855 Hold 343,388 35.4 39.1 44.8 22.3 20.2 17.6 15.2 13.6 11.7 32.9 32.4 34.3 23.7 24.2 25.6

MindTree (MINCON) 743 635Reduce 11,313 45.9 37.7 48.8 15.0 18.3 14.1 9.7 10.0 7.8 29.8 24.4 27.8 22.8 17.0 19.5

L&T Intotech (LTINFO) 1,531 1,710 Hold 26,301 87.3 84.1 96.8 17.4 18.0 15.6 12.8 12.1 10.1 40.4 33.0 32.2 31.0 25.1 24.4

NIIT Tech (NIITEC) 1,408 1,345 Hold 8,125 65.7 74.3 83.9 20.1 18.3 16.0 11.1 9.3 7.9 24.2 23.5 23.8 19.9 19.8 19.7

TCS (TCS) 2,022 2,005 Hold 739,500 83.8 86.2 95.5 23.4 22.8 20.6 17.7 16.6 14.8 43.8 42.6 43.9 34.4 33.4 34.4

Tech M (TECMAH) 723 720 Buy 55,655 47.7 45.8 51.7 13.0 13.5 12.0 7.6 7.6 6.5 23.6 21.1 21.2 21.2 17.9 17.8

Wipro (WIPRO) 250 300 Buy 150,558 14.9 17.2 20.5 16.7 14.5 12.2 10.2 9.9 7.9 17.8 18.7 20.0 15.8 18.0 19.1

RoE (%)

Sector / Company

EPS (|) P/E (x) EV/EBITDA (x) RoCE (%)





RATING RATIONALE

ICICI Direct endeavors to provide objective opinions and recommendations. ICICI Direct assigns ratings to its

stocks according to their notional target price vs. current market price and then categorizes them as Buy, Hold,

Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined

as the analysts' valuation for a stock

Buy: >15%

Hold: -5% to 15%;

Reduce: -15% to -5%;

Sell: <-15%

Pankaj Pandey Head – Research [email protected]

ICICI Direct Research Desk,

ICICI Securities Limited,

1st Floor, Akruti Trade Centre,

Road No 7, MIDC,

Andheri (East)

Mumbai – 400 093

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