1QFY2017 Result Update | IT
July 25, 2016
Wipro
ACCUMULATE
CMP
`539
Performance Highlights
Target Price
`582
(` cr)
1QFY17 4QFY16
% chg (qoq)
1QFY16
% chg (yoy)
Investment Period
12 Months
Net revenue
13,599
13,742
(1.0)
12,238
11.1
EBITDA
2,653
2,914
(9.0)
2,606
1.8
Stock Info
EBITDA margin (%)
19.5
21.2
(170)bps
21.3
(323)bps
PAT
2,052
2,235
(8.2)
2,187
(6.2)
Sector
IT
Source: Company, Angel Research
Market Cap (` cr)
1,33,073
Net Debt (` cr)
(21,460)
For 1QFY2017, Wipro posted a 2.6% sequential growth in its IT services revenues
to US$1,930.8mn (V/s our expectation of US$1,925mn), while in constant
Beta
0.6
currency (CC) terms the growth was of 2.2% qoq. In terms of geography, the
52 Week High / Low
613/509
growth was driven by the USA, which contributed ~53.5% of sales V/s 52.7% in
Avg. Daily Volume
1,37,423
4QFY2016. On the operating front, EBIT margins came in at 16.1% (V/s 17.1%
Face Value (`)
2
expected), a dip of 210bp qoq. The PAT for the quarter, at `2,052cr, came in
BSE Sensex
27,916
lower than our expectation of `2,174cr, and declined by 8.2% on a sequential
Nifty
8,566
basis. The company has given a revenue guidance of US$1,901-1,939mn for
Reuters Code
WIPR.BO
2QFY2017, which translates into a qoq CC growth of 0%-1.0%. We recommend
Bloomberg Code
[email protected]
an Accumulate on the stock.
Quarterly highlights: For 1QFY2017, the company posted a 2.6% sequential
Shareholding Pattern (%)
growth in its IT services revenues to US$1,930.8mn (V/s our expectation of
Promoters
73.3
US$1,925mn), while in constant currency (CC) terms the growth was of 2.2%
MF / Banks / Indian Fls
7.0
qoq. In terms of geography, the growth was driven by the USA, which contributed
FII / NRIs / OCBs
14.0
~53.5% of sales V/s 52.7% in 4QFY2016. In terms of industries, growth was led
Indian Public / Others
5.7
by Healthcare and Life Sciences & Services which contributed 15.3% of sales V/s
12.0% in 4QFY2016. On the operating front, the EBIT margin came in at 16.1%
(V/s 17.1% expected), a dip of 210bp qoq. Consequently, the PAT came in at
Abs.(%)
3m 1yr
3yr
`2,059cr (V/s `2,174cr expected), posting a qoq de-growth of 8.2%.
Sensex
8.0
(1.8)
38.5
Outlook and valuation: The Management has set a target of US$15bn of revenue
Wipro
(10.4)
(5.1)
37.8
and an EBIT margin of 23% by 2020. The company achieving the revenue target
would imply a CAGR of 20% in sales over the next four years. However the near term
3-year price chart
guidance suggests a moderate organic growth. We expect USD and INR revenue
CAGR for IT services to be at 8.4% and 7.9%, respectively, over FY2016-18E. We
recommend an Accumulate on the stock, given the valuations.
Key financials (Consolidated, IFRS)
Y/E March (` cr)
FY2015
FY2016
FY2017E
FY2018E
Net sales
46,955
51,631
55,188
60,155
% chg
8.1
10.0
6.9
9.0
Net profit
8,653
8,887
9,027
9,710
% chg
11.0
2.7
1.6
7.6
EBITDA margin (%)
22.3
21.7
17.9
17.9
Source: Company, Angel Research
EPS (`)
35.1
35.9
36.5
39.3
P/E (x)
15.3
15.0
14.8
13.7
P/BV (x)
3.3
2.8
2.9
2.6
RoE (%)
21.1
19.0
17.8
17.7
RoCE (%)
15.3
13.4
12.8
13.1
Sarabjit kour Nangra
EV/Sales (x)
2.4
2.2
1.9
1.7
+91 22-39357800 Ext: 6806
EV/EBITDA (x)
10.8
10.0
9.0
8.0
[email protected]
Source: Company, Angel Research; Note: CMP as of July 21, 2016
Please refer to important disclosures at the end of this report
1
Wipro | 1QFY2017 Result Update
Exhibit 1: 1QFY2017 performance (Consolidated, IFRS)
Y/E March (` cr)
1QFY17
4QFY16
% chg (qoq)
1QFY16
% chg (yoy)
FY2016
FY2015
% chg (yoy)
Net revenue
13,599
13,742
(1.0)
12,238
11.1
51,631
47,315
9.1
Cost of revenue
9,172
8,879
3.3
8,142
12.7
32,829
30,846
6.4
Gross profit
4,427
4,863
(9.0)
4,096
8.1
18,802
16,469
14.2
SGA expense
1,774
1,949
(9.0)
1,490
19.1
6,107
5,643
8.2
EBITDA
2,653
2,914
(9.0)
2,606
1.8
11,199
10,826
3.4
Dep. and amortisation
467
430
8.4
337
38.4
1,497
1,282
16.7
EBIT
2,186
2,484
(12.0)
2,269
(3.6)
9,702
9,544
1.7
Other income
485
433
11.9
529
1,770
1,626
8.8
PBT
2,671
2,917
(8.4)
2,798
(4.5)
11,472
11,170
2.7
Income tax
612
663
(7.6)
595
2.9
2,531
2,462
2.8
PAT
2,059
2,254
(8.7)
2,203
(6.5)
8,941
8,706
2.7
Minority interest
7
19
16
49
53
Adj. PAT
2,052
2,235
(8.2)
2,187
(6.2)
8,892
8,653
2.8
Diluted EPS
8.4
9.1
(8.0)
8.8
(5.1)
35.9
35.1
2.3
Gross margin (%)
32.6
35.4
(283)bps
33.5
(92)bps
36.4
34.8
(161)bps
EBITDA margin (%)
19.5
21.2
(170)bps
21.3
(179)bps
21.7
22.9
(119)bps
EBIT margin (%)
16.1
18.2
(212)bps
18.5
(246)bps
18.8
20.2
(138)bps
PAT margin(%)
15.1
16.3
(118)bps
17.9
(278)bps
17.2
18.3
(107)bps
Source: Company, Angel Research
Exhibit 2: 1QFY2017 - Actual vs Angel estimates
(` cr)
Actual
Estimate
Variation (%)
Net revenue
13,599
14,154
(3.9)
EBIT margin (%)
16.1
17.1
(100)bp
PAT
2,052
2,174
(5.6)
Source: Company, Angel Research
The company posted a 2.6% sequential growth in its USD IT services revenues for
the quarter to US$1,930.8mn, marginally outperforming our expectation of
US$1,925mn. The revenue is in line with the company’s guidance of US$1,912-
1,950mn (in terms of the actual currency realized) issued earlier. In INR terms, the
consolidated revenues came in at `13,599cr V/s our expectation of `14,154cr. On
constant currency basis, the company posted a sequential revenue growth of 2.2%.
In terms of geography, growth was driven by the USA which contributed ~53.5%
of sales V/s 52.7% in 4QFY2016; while in terms of industries, growth was led by
Healthcare and Life Sciences & Services which contributed ~15.3% of sales V/s
12.0% in 4QFY2016. Energy, Natural Resources & Utilities, a key domain of the
company contributed 13.2% of sales V/s 14.6% in 4QFY2016. The contribution of
Finance Solutions also dipped, ie to 25.6% of sales V/s 26.3% in 4QFY2016.
Further, Manufacturing and hi-tech accounted for 22.5% of sales V/s 23.2% of
sales in 4QFY2016.
During the quarter, revenue from the Energy vertical declined by 4.1% qoq (CC).
The pressure is expected to continue until oil prices stabilize, post which, customers
would tend to resume their discretionary spends. Finance Solutions saw good
July 25, 2016
2
Wipro | 1QFY2017 Result Update
growth and the environment in Healthcare and Life sciences is now robust post the
integration of recent acquisitions.
Exhibit 3: Trend in IT Services revenue
2,000
3
1,931
1,950
2.6
1,882
1,900
1,832
2.1
2.4
1,838
1,850
2
1,794
1,800
1,750
1,700
1.1
1
1,650
1,600
0.3
1,550
0
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
IT services
qoq growth (%)
Source: Company, Angel Research
Exhibit 4: Revenue growth (Industry wise - CC basis)
% to revenue
% growth (QoQ)
% growth (yoy)
Global media and telecom
7.6
(0.4)
14.6
Financial solutions
25.6
2.9
5.5
Manufacturing and hi-tech
22.5
(0.9)
4.6
Healthcare, life sciences and
15.3
17.7
46.6
services
Retail and transportation
15.8
(1.6)
6.9
Energy and utilities
13.2
(4.1)
(2.8)
Source: Company, Angel Research
Services wise, Wipro’s anchor service lines ADM (contributed 44.7% to revenue)
and Technology Infrastructure Services (contributed 27.9% to revenue) registered a
growth of 1.2% and a dip of 1.0% qoq, respectively. Analytics and Information
Management, which contributed 7.4% of sales, grew by 5.4% qoq while Product
Engineering and Mobility contributed 7.1% of sales and de-grew by 8.9% qoq.
Exhibit 5: Revenue growth (Service wise)
Service verticals
% to revenue
% growth (QoQ)
% growth (yoy)
Technology infrastructure services
27.9
(1.0)
7.2
Analytics and information management
7.4
5.4
6.2
BPO
12.9
24.9
49.3
Product engineering and mobility
7.1
(8.9)
(0.8)
ADM
44.7
1.2
1.3
Source: Company, Angel Research
Geography wise, the developed economies America and Europe grew by 4.2%
and 0.5% qoq in CC terms, respectively. India posted a 2.6% qoq CC de-growth
during the period. However, APAC and other emerging markets posted a 0.4%
qoq de-growth for the quarter.
July 25, 2016
3
Wipro | 1QFY2017 Result Update
Exhibit 6: Revenue growth (Geography wise, CC basis)
% to revenue
% growth (QoQ)
% growth (yoy)
America
53.5
4.2
10.1
Europe
25.4
0.5
10.2
India and Middle East
10.4
(2.6)
8.7
APAC and other emerging markets
10.7
(0.4)
6.0
Source: Company, Angel Research
The IT Products segment reported a 28.2% yoy dip in revenue to `590cr during the
quarter.
Exhibit 7: IT Products - Revenue growth (yoy)
20
900
10
800
7.0
0
700
(10)
(16.0)
600
(20)
500
(28.2)
(30)
400
(38.3)
(40)
300
(50)
(52.5)
200
(60)
821
565
650
449
590
100
(70)
1QFY16
2QFY16
3QFY16
4QFY16
1QFY2017
IT products
yoy growth (%)
Source: Company, Angel Research
July 25, 2016
4
Wipro | 1QFY2017 Result Update
Hiring and utilization
Wipro reported a net addition of 951 employees in its IT Services’ employee base,
which now stands at 1,73,863. Voluntary attritions (annualized) in the global IT
business increased considerably but remained stagnant on a net basis at 16.5%.
The utilization rate of the global IT business moved up by 180bp sequentially to
69.9%. Going ahead, an improvement in utilization level will be an important
margin lever.
Exhibit 8: Employee pyramid
Employee pyramid
1QFY16 2QFY16 3QFY16 4QFY16 1QFY17
Utilization - Global IT (%)
71.3
69.5
66.4
68.1
69.9
Attrition (%)
Global IT
16.4
16.4
16.3
16.1
16.5
BPO
12.0
10.2
9.9
11.1
11.7
Net additions
3,572
6,607
2,268
2,248
951
Source: Company, Angel Research
Margins dip
On the operating front, the EBIT margin for the IT services business came in at
17.8% V/s 19.7% in 4QFY2016, a downtick of 190bp qoq; while the consolidated
EBIT margin came in 16.1% V/s 17.1% in 4QFY2016. The miss in terms of overall
EBIT margins was largely on account of operating losses in the hardware business
(-6.8% EBIT margin).
Exhibit 9: Segment-wise EBIT margin trend
25
21.0
20.7
20.2
20.1
17.8
20
19.0
15
18.5
17.9
18.2
16.1
10
5
1.5
1.6
0
(4.0)
1QFY16
2QFY16
3QFY16
4QFY16
1QFY2017
(5)
(3.0)
(10)
(6.3)
IT services
IT products
Consolidated
Source: Company, Angel Research
July 25, 2016
5
Wipro | 1QFY2017 Result Update
Client pyramid
Wipro added 50 new clients during the quarter with its active client base now
standing at 1,208. Amongst these, 1 has been in the US$75mn+ bracket, 2 in
US$20mn+ bracket and 1 in the US$3mn+ bracket. Wipro cited that there has
been increasing pricing pressure in large deals, led by growing competitive
pressures. Both, deal sizes as well as value of deals are under pressure. In such an
environment, Wipro has been trying to offset pressure by increasing the use of
automation.
Exhibit 10: Client metrics
Particulars
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
US$100mn plus
10
10
9
9
9
US$75mn-$100mn
4
7
8
9
10
US$50mn-$75mn
15
14
15
15
14
US$20mn-$50mn
55
54
53
56
58
US$10mn-$20mn
59
69
69
71
79
US$5mn-$10mn
81
90
93
88
82
US$3mn-$5mn
69
77
78
83
84
US$1mn-$3mn
218
212
211
219
229
New client addition
36
67
39
119
50
Active customers
1071
1100
1105
1223
1208
Source: Company, Angel Research
Investment highlights
Moderate outlook on growth: For 2QFY2017, the company has given a revenue
guidance of US$1,901-1,939mn, implying a US$ qoq growth of 0-1% on CC, all
organic as full integration of HPS has been completed in 1QFY2017. The
company mentioned that due to delays in completion of closing conditions that
exceeded the target closing date the Viteos acquisition has been called off by both
companies. So after the 2QFY2017 guidance, the expected recovery in the
company looks more likely in FY2018. We expect US$ and INR revenue CAGR to
be at 8.4% and 7.9%, respectively, over FY2016-18E.
Target sales CAGR of 20% and EBIT Margin of 23%: The company as part of its
vision for 2020 is targeting to reach US$15bn revenues with 23% EBIT margin,
implying revenue CAGR of ~20% over the next four years. If the margins expand
by 300bp, then it would imply an even higher CAGR for earnings. The company
sees itself better placed than this time last year to latch on to opportunities in the
market though the same aggression and optimism is yet to reflect in its
performance. Going by the guidance, the company’s organic growth outlook is not
even closer to its peers. However, on the acquisition front, the company has been
very aggressive in comparison to its peers.
During the quarter, the company acquired HealthPlan Services from Water Street
Healthcare Partners. Since partnering with Water Street in 2008, HealthPlan
Services has grown to become the leading independent technology and Business
Process as a Service (BPaaS) provider in the US health insurance market. As part of
the agreement, Wipro will acquire 100% of HealthPlan Services' shares for a
purchase consideration of US$460mn. Headquartered in Tampa, Florida,
July 25, 2016
6
Wipro | 1QFY2017 Result Update
HealthPlan Services employs over 2,000 associates. HealthPlan Services offers
market-leading technology platforms and a fully integrated BPaaS solution to
health insurance companies in the individual, group and ancillary markets.
HealthPlan Services’ BPaaS solutions are ideal for players who want to operate in
the private and public exchanges and the off-exchange individual market in the
US.
Outlook and valuation
The new CEO of the company has put in place an aggressive target of 20%
revenue CAGR over the next four years, with much improved profitability (where
the company has significant levers in the form of automation and improving
utilization levels). Also, the company announced a total of `6/share in dividend
and up to `2,500cr through a buyback. Thus the total payout in FY2016 amounts
to ~45% compared to 34% in FY2015. The company guided at sustaining ~40%
payout going forward, which will improve the overall returns of the shareholders.
On the valuation front, the stock is currently trading at 14.8x its FY2017E and
13.7x its FY2018E EPS, ie at a discount to its peers, while we expect the gap to
narrow down once the company’s performance comes in line with its peers in
terms of growth and profitability. We recommend an Accumulate on the stock with
a target price of `582.
Exhibit 11: Key assumptions
FY2017E
FY2018E
Revenue growth - IT services (USD)
7.8
9.0
USD-INR rate (realized)
65.7
65.7
Revenue growth - Consolidated (`)
6.9
9.0
EBITDA margin (%)
17.9
17.9
Tax rate (%)
22.0
22.0
EPS growth (%)
1.6
7.6
Source: Company, Angel Research
Exhibit 12: One-year forward PE chart
1100
950
800
650
500
350
200
50
Price
27x
22x
17x
12x
7x
Source: Company, Angel Research
July 25, 2016
7
Wipro | 1QFY2017 Result Update
Exhibit 13: Recommendation summary
Company
Reco
CMP Tgt. price Upside
FY2018E FY2018E
FY2016-18E
FY2018E FY2018E
(`)
(`)
(%)
EBITDA (%)
P/E (x)
EPS CAGR (%) EV/Sales (x)
RoE (%)
HCL Tech
Buy
729
1,000
37.2
20.5
11.4
9.6
1.2
17.9
Infosys
Buy
1,083
1,370
26.5
27.5
15.0
10.4
2.6
22.3
TCS
Buy
2,493
2,867
15.0
27.3
16.6
10.1
3.2
33.9
Tech Mahindra
Buy
505
700
38.6
17.0
12.2
13.2
1.2
20.7
Wipro
Buy
539
582
7.9
17.9
13.7
4.5
1.7
17.7
Source: Company, Angel Research
Company background
Wipro is among the leading Indian companies, majorly offering IT services. The
company is also engaged in the IT hardware (10% of sales) business. Wipro's IT
arm is India's fourth largest IT firm, employing more than 1,68,000 professionals,
offering a wide portfolio of services such as ADM, consulting and package
implementation, and servicing more than 1,000 clients.
July 25, 2016
8
Wipro | 1QFY2017 Result Update
Profit & Loss account (Consolidated, IFRS)
Y/E March (` cr)
FY2014 FY2015 FY2016 FY2017E FY2018E
Net revenue
43,427
46,955
51,631
55,188
60,155
Cost of revenues
29,549
30,846
34,325
38,632
42,108
Gross profit
13,878
16,108
17,306
16,556
18,046
% of net sales
32.0
34.3
33.5
30.0
30.0
Selling and mktg exp.
2,925
3,063
3,319
3,698
4,030
% of net sales
6.7
6.5
6.4
6.7
6.7
General and admin exp.
2,354
2,585
2,788
2,980
3,248
% of net sales
5.4
5.5
5.4
5.4
5.4
Depreciation and amortization
1,111
1,282
1,496
1,600
1,744
% of net sales
2.6
2.7
2.9
2.9
2.9
EBIT
8,600
9,179
9,703
9,879
10,768
% of net sales
19.8
19.5
18.8
17.9
17.9
Other income, net
1,501
1,990
1,770
1,770
1,770
Share in profits of eq. acc. ass.
0
0
0
0
0
Profit before tax
10,101
11,168
11,473
11,648
12,538
Provision for tax
2,260
2,462
2,537
2,563
2,758
% of PBT
22.4
22.0
22.1
22.0
22.0
PAT
7,840
8,706
8,936
9,086
9,779
Share in earnings of associate
-
-
-
-
1
Minority interest
44
53
49
59
69
Adj. PAT
7,797
8,653
8,887
9,027
9,710
Diluted EPS (`)
31.5
35.1
35.9
36.5
39.3
July 25, 2016
9
Wipro | 1QFY2017 Result Update
Balance sheet (Consolidated, IFRS)
Y/E March (` cr)
FY2014
FY2015
FY2016
FY2017E
FY2018E
Assets
Goodwill
6,342
6,808
10,199
6,316
6,317
Intangible assets
194
793
1,584
1,584
1,584
Property, plant & equipment
5,145
5,421
6,495
6,795
7,095
Investment in equ. acc. investees
268
387
491
491
491
Derivative assets
29
74
26
26
26
Non-current tax assets
1,019
1,141
1,175
1,175
1,175
Deferred tax assets
336
295
380
380
380
Other non-current assets
1,430
1,437
1,583
1,583
1,583
Total non-current assets
14,762
16,354
21,933
18,350
18,651
Inventories
229
485
539
539
539
Trade receivables
8,539
9,153
10,238
10,756
11,724
Other current assets
3,947
7,336
10,407
10,407
10,407
Unbilled revenues
3,933
4,234
4,827
4,827
4,827
Available for sale investments
6,056
5,391
13,294
13,294
13,294
Current tax assets
977
649
781
781
781
Derivative assets
366
508
568
568
568
Cash and cash equivalents
11,420
15,894
9902
17852
21452
Total current assets
35,469
43,649
50,556
59,023
63,592
Total assets
50,230
60,003
72,489
77,373
82,243
Equity
Share capital
493
493
494
493
494
Share premium
1,266
1,403
1,462
1,462
1,462
Retained earnings
31,495
37,225
42,574
46,511
50,625
Share based payment reserve
102
131
223
102
103
Other components of equity
1,047
1,545
1,853
1,853
1,853
Shares held by controlled trust
(54)
-
-
-
1
Equity attrib. to shareholders of Co.
34,350
40,789
46,606
50,421
54,538
Minority interest
139
165
222
222
222
Total equity
34,489
40,954
46,828
50,644
54,760
Liabilities
Long term loans and borrowings
1,091
1,271
1,736
1,736
1,736
Deferred tax liability
180
324
511
511
511
Derivative liabilities
63
16
12
12
12
Non-current tax liability
345
670
823
823
823
Other non-current liabilities
417
366
723
723
723
Provisions
1
1
-
-
-
Total non-current liabilities
2096
2647
3804
3804
3804
Loans and bank overdraft
4,068
6,621
10,786
10,786
10,786
Trade payables
5,226
5,875
6,819
7,495
8,169
Unearned revenues
1,277
1,655
1,808
1,877
1,878
Current tax liabilities
1,248
804
702
1,025
1,103
Derivative liabilities
250
75
234
234
234
Other current liabilities
1,439
1,222
1,382
1,382
1,382
Provisions
137
152
126
126
126
Total current liabilities
13,646
16,403
21,856
22,925
23,678
Total liabilities
15,742
19,050
25,661
26,729
27,483
Total equity and liabilities
50,230
60,003
72,489
77,373
82,243
July 25, 2016
10
Wipro | 1QFY2017 Result Update
Cash flow statement (Consolidated, IFRS)
Y/E March (` cr)
FY2014
FY2015
FY2016
FY2017E
FY2018E
Pre tax profit from operations
8,935
11,168
11,473
11,648
12,538
Depreciation
1,111
1,282
1,496
1,600
1,744
Expenses (deferred)/written off
(13)
(13)
(13)
(13)
(13)
Pre tax cash from operations
10,033
12,438
12,956
13,236
14,269
Other income/prior period ad
1,165
1,990
1,770
1,770
1,770
Net cash from operations
11,198
14,428
14,726
15,006
16,039
Tax
(2,260)
(2,462)
(2,537)
(2,563)
(2,758)
Cash profits
8,938
11,965
12,189
12,443
13,281
(Inc)/dec in current assets
(2,653)
(8,181)
(6,906)
(8,468)
(4,569)
Inc/(dec) in current liab.
(828)
2,757
5,453
1,068
754
Net trade working capital
(3,482)
(5,423)
(1,453)
(7,399)
(3,815)
Cashflow from oper. actv.
5,456
6,542
10,736
5,044
9,466
(Inc)/dec in fixed assets
(1,203)
(276)
(1,075)
(300)
(300)
(Inc)/dec in intangibles
(889)
(600)
(791)
-
-
(Inc)/dec in investments
594
(119)
(104)
-
-
(Inc)/dec in net def. tax assets
87
-
-
-
-
(Inc)/dec in derivative assets
(24)
-
-
-
-
(Inc)/dec in non-current tax asset
12
7
146
-
-
(Inc)/dec in minority interest
22
9
(4)
10
10
Inc/(dec) in other non-current liab
90
273
510
-
-
(Inc)/dec in other non-current ast.
(122)
(122)
(34)
-
-
Cashflow from investing activities
(1,667)
(826)
(1,352)
(290)
(290)
Inc/(dec) in debt
1,006
180
465
-
-
Inc/(dec) in equity/premium
(123)
314
(14,062)
8,285
21
Dividends
(1,736)
(1,736)
(1,780)
(5,089)
(5,596)
Cashflow from financing activities
(853)
(1,242)
(15,377)
3,196
(5,575)
Cash generated/(utilized)
2,936
4,474
(5,992)
7,950
3,601
Cash at start of the year
8,484
11,420
15,894
9,902
17,852
Cash at end of the year
11,420
15,894
9,902
17,852
21,452
July 25, 2016
11
Wipro | 1QFY2017 Result Update
Key Ratios
Y/E March
FY2014 FY2015 FY2016 FY2017E FY2018E
Valuation ratio (x)
P/E (on FDEPS)
17.1
15.3
15.0
14.8
13.7
P/CEPS
8.1
7.5
7.2
7.0
6.5
P/BVPS
3.9
3.3
2.8
2.9
2.6
Dividend yield (%)
1.5
2.2
1.1
3.8
4.2
EV/Sales
2.7
2.4
2.2
1.9
1.7
EV/EBITDA
12.0
10.8
10.0
9.0
8.0
EV/Total assets
2.3
1.9
1.5
1.3
1.2
Per share data (`)
EPS (Fully diluted)
31.5
35.1
35.9
36.5
39.3
Cash EPS
66.3
72.1
75.2
76.5
82.8
Dividend
8.0
12.0
6.0
20.6
22.6
Book value
139.5
165.7
189.4
188.1
204.8
Return ratios (%)
RoCE (pre-tax)
17.1
15.3
13.4
12.8
13.1
Angel RoIC
32.6
28.8
24.8
24.8
26.1
RoE
22.6
21.1
19.0
17.8
17.7
Turnover ratios(x)
Asset turnover (fixed assets)
8.5
8.9
8.7
8.3
8.7
Receivables days
68
69
69
70
71
Payable days
67
67
67
67
67
July 25, 2016
12
Wipro | 1QFY2017 Result Update
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Wipro
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No
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Buy (> 15%)
Accumulate (5% to 15%)
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over 12 months investment period):
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July 25, 2016
13