3QFY2016 Result Update | IT
February 23, 2016
Wipro
BUY
CMP
`547
Performance Highlights
Target Price
`670
(` cr)
3QFY16 2QFY16
% chg (qoq)
3QFY15
% chg (yoy)
Investment Period
12 Months
Net revenue
12,861
12,514
2.8
11,993
7.2
EBITDA
2,648
2,729
(2.9)
2,676
(1.0)
Stock Info
EBITDA margin (%)
20.6
21.8
(121)bps
22.3
(172)bps
PAT
2,234
2,235
(0.1)
2,193
1.9
Sector
IT
Source: Company, Angel Research
Market Cap (` cr)
135,227
Wipro posted lower than expected numbers on all fronts for 3QFY2016. IT
Net Debt (` cr)
(20,014)
Services posted a 0.3% sequential growth in USD revenues to US$1,838mn (V/s
Beta
0.6
an expected US$1,841mn). In constant currency (CC) terms, IT Services posted a
52 Week High / Low
677/509
1.4% QoQ growth. On the operating front, the EBITDA margin came in at 20.6%
Avg. Daily Volume
105,336
V/s 21.8% in 2QFY2016, ie a downtick of 121bp QoQ. Consequently, the PAT
Face Value (`)
2
came in at `2,234cr (V/s an expected `2,318cr), a de-growth of 0.1% QoQ. For
BSE Sensex
23,709
4QFY2016, the company has guided for revenue of US$1,875-1,912mn, a QoQ
Nifty
7,211
growth of 2.0-4.0%. We maintain our Buy recommendation on the stock with a
Reuters Code
WIPR.BO
price target of `670.
Bloomberg Code
[email protected]
Quarterly highlights: During 3QFY2016, the company posted lower than
expected numbers on all fronts. IT Services posted a 0.3% sequential growth in
USD revenues to US$1,838mn (V/s an expected US$1,841mn). In CC terms, IT
Shareholding Pattern (%)
Services posted a 1.4% QoQ growth. On the operating front, the EBITDA margin
Promoters
73.4
came in at 20.6% V/s 21.8% in 2QFY2016, ie a downtick of 121bp QoQ.
MF / Banks / Indian Fls
6.7
Consequently, the PAT came in at `2,234cr (V/s an expected `2,318cr) a de-
FII / NRIs / OCBs
12.3
growth of 0.1% QoQ. Among other operating matrix, the gross utilization levels
Indian Public / Others
7.6
dropped to 66.4% V/s 69.5% in 2QFY2016. Net utilization (excl support) dropped
to 73.8% V/s 77.2% in 2QFY2016. In terms of client addition, it added one client
US$50mn+ and some other major ones in small order sizes. Overall, 39 clients
Abs.(%)
3m 1yr
3yr
were added during the quarter.
Sensex
(8.3)
(19.5)
20.7
Outlook and valuation: The Management remains confident of revenue growth
Wipro
(1.8)
(17.0)
33.6
pick-up, citing momentum in large deal closures and win rates, uptick in
discretionary spending, its strong business pipeline and with demand from the US
sustaining. We expect USD and INR revenue CAGR for IT services to be at 7.0%
3-year price chart
and 11.5%, respectively, over FY2015-17E. We recommend a Buy.
700.0
600.0
Key financials (Consolidated, IFRS)
Y/E March (` cr)
FY2014
FY2015
FY2016E
FY2017E
500.0
Net sales
43,427
46,955
52,827
58,410
400.0
% chg
16.0
8.1
12.5
10.6
300.0
Net profit
7,797
8,653
9,547
10,403
200.0
% chg
17.5
11.0
10.3
9.0
EBITDA margin (%)
22.9
23.1
23.7
23.8
EPS (`)
31.5
35.1
38.6
42.1
Source: Company, Angel Research
P/E (x)
17.4
15.6
14.2
13.0
P/BV (x)
3.9
3.3
2.8
2.5
RoE (%)
22.6
21.1
19.5
18.0
RoCE (%)
17.1
15.3
15.2
14.7
Sarabjit kour Nangra
EV/Sales (x)
2.7
2.5
2.0
1.7
+91 22-39357800 Ext: 6806
EV/EBITDA (x)
12.2
11.0
9.1
7.5
[email protected]
Source: Company, Angel Research; Note: CMP as of February 19, 2016
Please refer to important disclosures at the end of this report
1
Wipro | 3QFY2016 Result Update
Exhibit 1: 3QFY2016 performance (Consolidated, IFRS)
Y/E March (` cr)
3QFY16
2QFY16
% chg (qoq)
3QFY15
% chg (yoy) 9MFY2016
9MFY2015
% chg (yoy)
Net revenue
12,861
12,514
2.8
11,993
7.2
37,889
34,813
8.8
Cost of revenue
8,675
8,229
5.4
7,922
9.5
25,022
22,912
9.2
Gross profit
4,186
4,284
(2.3)
4,071
2.8
12,867
11,901
8.1
SGA expense
1,537
1,556
(1.2)
1,395
10.2
4,582
4,193
9.3
EBITDA
2,648
2,729
(2.9)
2,676
(1.0)
8,285
7,708
7.5
Dep. and amortisation
352
353
(0.3)
365
(3.5)
1,066
956
11.5
EBIT
2,296
2,376
(3.3)
2,311
(0.6)
7,219
6,752
6.9
Other income
572
619
(7.7)
515
1,337
1,504
(11.1)
PBT
2,868
2,995
(4.2)
2,826
1.5
8,555
8,256
3.6
Income tax
625
654
(4.5)
623
0.2
1,868
1,837
1.7
PAT
2,243
2,341
(4.2)
2,203
1.8
6,687
6,419
4.2
Minority interest
9
5
10
30
39
Adj. PAT
2,234
2,235
(0.1)
2,193
1.9
6,657
6,381
4.3
Diluted EPS
9.1
9.1
(0.1)
8.9
1.9
27.1
26.0
4.4
Gross margin (%)
32.5
34.2
(169)bps
33.9
(140)bps
34.0
34.2
(23)bps
EBITDA margin (%)
20.6
21.8
(121)bps
22.3
(172)bps
21.9
22.1
(28)bps
EBIT margin (%)
17.9
19.0
(113)bps
19.3
(141)bps
19.1
19.4
(34)bps
PAT margin(%)
17.4
17.9
(49)bps
18.3
(91)bps
17.6
18.3
(76)bps
Source: Company, Angel Research
Exhibit 2: 3QFY2016 - Actual vs Angel estimates
(` cr)
Actual
Estimate
Variation (%)
Net revenue
12,861
12,739
1.0
EBIT margin (%)
20.6
21.5
(91)bp
PAT
2,234
2,318
(3.6)
Source: Company, Angel Research
Lower-than-expected results
During 3QFY2016, the company posted lower than expected numbers on all
fronts. IT Services posted a
0.3% sequential growth in USD revenues to
US$1,838mn (V/s US$1,841mn expected). In constant currency (CC) terms, IT
Services posted a 1.4% qoq growth. Revenues came in at the middle end of the
band of US$1,821-1,858mn at the actual currency realized. In rupee terms,
overall consolidated revenues came in at `12,861cr (V/s `12,739cr expected) a
growth of 2.8% qoq.
In terms of geographies, USA posted a 0.3% QoQ CC growth, Europe posted a
1.4% QoQ CC growth, India & Middle East Business posted a 5.4% QoQ CC
growth and APAC and Other Emerging Markets posted a 3.1% QoQ CC growth.
In terms of verticals Global Media & Telecom posted a 2.7% QoQ CC growth,
Finance Solutions posted a 0.7% QoQ CC decline, Manufacturing & Hi-tech
posted a 0.6% QoQ CC decline, Healthcare Life Sciences & Services posted a
6.0% QoQ CC growth, Retail, Consumer Goods & Transportation posted a 4.6%
QoQ CC growth and Energy, Natural Resources & Utilities posted no growth
during the period.
February 23, 2016
2
Wipro | 3QFY2016 Result Update
Exhibit 3: Trend in IT Services revenue growth (QoQ)
1,900
3
1,850
2.1
2
1.3
1,800
1.1
1
1,750
0.3
1,700
0
1,650
(1.1)
(1)
1,600
1,550
(2)
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
IT services
qoq growth (%)
Source: Company, Angel Research
Industry wise, Wipro’s Global Media & Telecom vertical grew by 2.7% QoQ in CC
terms. The revenue from the anchor industry vertical, Financial Solutions, de-grew
by 0.7% QoQ in CC terms. Revenue from Healthcare, Life Sciences & Services
grew by 6.0% QoQ in CC terms while that from Energy, Natural Resources &
Utilities was flat QoQ in CC terms. Manufacturing and Hi-tech posted a de-growth
of 0.6% QoQ in CC terms while Retail & Transportation posted a 4.6% QoQ
growth in CC terms.
Exhibit 4: Revenue growth (Industry wise - CC basis)
% to revenue
% growth (QoQ)
% growth (yoy)
Global media and telecom
13.4
2.7
5.4
Financial solutions
26.2
(0.7)
7.8
Manufacturing and hi-tech
18.4
(0.6)
6.6
Healthcare, life sciences and services
12.0
6.0
7.2
Retail and transportation
15.6
4.6
16.7
Energy and utilities
14.4
0.0
(5.3)
Source: Company, Angel Research
Services wise, Wipro’s anchor service lines
- Business Application Services
(contributed 46.7% to revenue) and Technology Infrastructure Services (contributed
28.1% to revenue) registered a rise in revenue of
0.0% and
0.7% QoQ,
respectively. Analytics and Information Management (which contributed 7.4% of
sales) de-grew by 1.4% QoQ. Product Engineering and Mobility (which contributed
8.0% of sales) grew by 2.1% QoQ. Consulting, R&D and BPO posted a QoQ
growth of (15.2)%, (0.2)% and 1.0%, respectively.
February 23, 2016
3
Wipro | 3QFY2016 Result Update
Exhibit 5: Revenue growth (Service wise)
Service verticals
% to revenue
% growth (QoQ)
% growth (yoy)
Technology infrastructure services
28.1
0.7
3.8
Analytics and information management
7.4
(1.4)
8.4
BPO
9.8
1.0
5.9
Product engineering and mobility
8.0
2.1
16.2
ADM
46.7
0.0
(1.9)
R&D business
10.4
(0.2)
9.3
Consulting
1.6
(15.2)
(14.2)
Source: Company, Angel Research
Geography wise, the developed economies - America and Europe, grew by 0.3%
and 1.4% QoQ in CC terms, respectively. India posted a 5.4% QoQ growth
during the period.
Exhibit 6: Revenue growth (Geography wise, CC basis)
% to revenue
% growth (QoQ)
% growth (yoy)
America
52.8
0.3
6.8
Europe
24.8
1.4
(2.3)
India and Middle East
11.0
5.4
20.9
APAC and other emerging markets
11.4
3.1
12.3
Source: Company, Angel Research
The IT Products segment reported a 16.0% yoy dip in revenue to `650cr, during
the quarter.
Exhibit 7: IT Products - Revenue growth (yoy)
1,000
10
7.0
944
900
0
800
821
700
(16.0)
(10)
774
(14.9)
600
650
(20)
500
565
(23.8)
400
(30)
300
(38.3)
(40)
200
100
(50)
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
IT products
yoy growth (%)
Source: Company, Angel Research
February 23, 2016
4
Wipro | 3QFY2016 Result Update
Hiring and utilization
Wipro reported a net addition of 2,268 employees in its IT Services’ employee
base, which now stands at 170,664. Voluntary attritions (annualized) in the global
IT business increased considerably, but remained stagnant on a net basis at
16.3%. The Management indicated that it has taken necessary steps to curtail
attritions and expects them to decline going ahead. Also, the Management noted
that the company is going measured in terms of hiring due to hyper automation
process going on in the company in the run services, resulting in higher
productivity. The utilization rate of the global IT business moved down by 310bp
sequentially to 66.4%. Going ahead, an improvement in utilization level will be an
important margin lever.
Exhibit 8: Employee pyramid
Employee pyramid
3QFY15 4QFY15 1QFY16 2QFY16 3QFY16
Utilization - Global IT (%)
68.5
70.5
71.3
69.5
66.4
Attrition (%)
Global IT
16.5
16.5
16.4
16.4
16.3
BPO
13.1
13.3
12.0
10.2
9.9
Net additions
2,569
1,351
3,572
6,607
2,268
Source: Company, Angel Research
Margins dip
On the operating front, the EBITDA margin came in at 20.6% V/s 21.5% in
2QFY2016, a downtick of 121bp qoq. The IT Services segment posted an EBIT
margin of 20.2% V/s 20.7% in 2QFY2016. The 50bps decline was a result of costs
associated with the Chennai floods. On the product business front, the company
posted a 4% operating loss. The miss was largely on account of operating losses in
the hardware business to the tune of `50.6cr (-7.8% EBIT margin). Lower-than-
expected revenues and higher provisioning led to the loss during the quarter,
which should start recovering going ahead.
Exhibit 9: Segment-wise EBIT margin trend
25
22.2
21.8
21.0
20.7
20.2
20
20.0
19.3
19.0
18.5
17.9
15
10
5
1.5
0.8
0.6
1.6
0
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
(5)
(4.0)
(10)
IT services
IT products
Consolidated
Source: Company, Angel Research
February 23, 2016
5
Wipro | 3QFY2016 Result Update
Client pyramid
Wipro added 39 new clients in 3QFY2016, with its active client base standing at
1,105. Wipro cited that there has been increasing pricing pressure in large deals,
led by growing competitive pressures. Both, deal sizes and value of deals are
under pressure. In this environment, Wipro has been trying to offset the pressure
by increasing the use of automation.
Exhibit 10: Client metrics
Particulars
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
US$100mn plus
10
11
10
10
9
US$75mn-$100mn
6
4
4
7
8
US$50mn-$75mn
15
16
15
14
15
US$20mn-$50mn
53
55
55
54
53
US$10mn-$20mn
69
64
59
69
69
US$5mn-$10mn
73
81
81
90
93
US$3mn-$5mn
74
80
69
77
78
US$1mn-$3mn
226
231
218
212
211
New client addition
44
65
36
67
39
Active customers
1,018
1,054
1071
1100
1105
Source: Company, Angel Research
Investment highlights
Moderate outlook: For 3QFY2016, the company has given a revenue guidance of
US$1,875-1,912mn, implying a US$ QoQ growth of 2.0-4.0%. The Management
remains confident of the revenue growth pick-up sustaining, citing a pick-up in
large deal closures and win rates, uptick in discretionary spending, strong business
pipeline and sustained momentum in demand from the US. We expect USD and
INR revenue CAGR for IT services to be at 7.0% and 11.5%, respectively, over
FY2015-17E.
Deal pipeline looks robust: Company sees itself better placed than this time last
year to latch on to opportunities in the market and remains focused on improving
traction from its top 125 clients. As per the company, it is seeing a broad based
pick up in discretionary spending across verticals in the US, which should help
drive a better performance in the geography. In addition, the company remains
confident of its growth prospects with increased penetration in Europe. Wipro has
chosen a growth strategy of focusing on a selected few segments in terms of
industry verticals and services. Wipro is now better positioned than it was three
years ago to capture upsides from overall market improvement and can reduce the
gap in revenue growth with its peers.
Further, the company has bought the information technology (IT) services business
of the Canadian logistics and utilities firm, Atco, for US$195mn.The deal, which
comes less than a year since Wipro bought US-based Opus Capital Markets
Consultants Llc for US$75mn, is one of the company’s largest acquisitions in
recent years, and comes bundled with a 10-year, US$1.1bn outsourcing contract
with Atco. The outsourcing contract—one of the largest ever for Wipro—is
expected to result in annual revenue of about US$112mn.
February 23, 2016
6
Wipro | 3QFY2016 Result Update
Outlook and valuation
Wipro has been showing a decent performance in the past couple of quarters by
rationalizing costs. We have factored in a FY2015-17E EBIT margin at 12.5%
considering that most headwinds are already behind for Wipro and hence believe
that this can be achieved if the company improves its operational efficiency. The
stock is currently trading at 14.2x FY2016E and 13.0x FY2017E EPS, ie at a
discount to its peers. We recommend a Buy on the stock with a target price of
`670.
Exhibit 11: Key assumptions
FY2016E
FY2017E
Revenue growth - IT services (USD)
4.0
10.0
USD-INR rate (realized)
65.0
65.0
Revenue growth - Consolidated (`)
12.5
10.6
EBITDA margin (%)
23.7
23.8
Tax rate (%)
22.0
22.0
EPS growth (%)
10.3
9.0
Source: Company, Angel Research
Exhibit 12: One-year forward PE chart
1,100
950
800
650
500
350
200
50
Price
27x
22x
17x
12x
7x
Source: Company, Angel Research
Exhibit 13: Recommendation summary
Company
Reco
CMP Tgt. price Upside FY2017E FY2017E FY2015-17E FY2017E FY2017E
(`)
(`)
(%) EBITDA (%)
P/E (x) EPS CAGR (%) EV/Sales (x) RoE (%)
HCL Tech
Buy
850
1,038
22.1
21.5
14.7
6.0
2.0
18.8
Infosys
Buy
1,126
1,347
19.7
27.5
17.1
10.6
2.9
20.1
TCS
Buy
2,320
2,854
23.0
28.5
16.8
11.8
3.3
38.9
Tech Mahindra
Buy
440
530
20.5
17.0
13.1
10.8
1.2
19.1
Wipro
Buy
547
670
22.5
23.8
13.0
9.7
1.7
17.2
Source: Company, Angel Research
February 23, 2016
7
Wipro | 3QFY2016 Result Update
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.
February 23, 2016
8
Wipro | 3QFY2016 Result Update
Profit & Loss account (Consolidated, IFRS)
Y/E March (` cr)
FY2013 FY2014 FY2015 FY2016E FY2017E
Net revenue
37,426
43,427
46,955
52,827
58,410
Cost of revenues
26,067
29,549
30,846
35,922
39,719
Gross profit
11,359
13,878
16,108
16,905
18,691
% of net sales
30.4
32.0
34.3
32.0
32.0
Selling and mktg exp.
2,421
2,925
3,063
3,539
3,913
% of net sales
6.5
6.7
6.5
6.7
6.7
General and admin exp.
2,203
2,354
2,585
2,853
3,154
% of net sales
5.9
5.4
5.5
5.4
5.4
Depreciation and amortization
1,084
1,111
1,282
1,373
1,519
% of net sales
2.9
2.6
2.7
2.6
2.6
EBIT
6,735
8,600
9,179
10,513
11,624
% of net sales
18.0
19.8
19.5
19.9
19.9
Other income, net
1,626
1,501
1,990
1,808
1,808
Share in profits of eq. acc. ass.
0
0
0
0
0
Profit before tax
8,360
10,101
11,168
12,320
13,431
Provision for tax
1,691
2,260
2,462
2,710
2,955
% of PBT
20.2
22.4
22.0
22.0
22.0
PAT
6,669
7,840
8,706
9,610
10,477
Share in earnings of associate
-
-
-
-
-
Minority interest
34
44
53
63
73
Adj. PAT
6,636
7,797
8,653
9,547
10,403
Diluted EPS (`)
26.8
31.5
35.1
38.6
42.1
February 23, 2016
9
Wipro | 3QFY2016 Result Update
Balance sheet (Consolidated, IFRS)
Y/E March (` cr)
FY2013
FY2014
FY2015
FY2016E
FY2017E
Assets
Goodwill
5,476
6,342
6,808
6,919
6,316
Intangible assets
171
194
793
793
793
Property, plant & equipment
5,053
5,145
5,421
5,721
6,021
Investment in equ. acc. investees
-
268
387
387
387
Derivative assets
5
29
74
74
74
Non-current tax assets
1,031
1,019
1,141
1,141
1,141
Deferred tax assets
424
336
295
295
295
Other non-current assets
1,074
1,430
1,437
1,430
1,430
Total non-current assets
13,233
14,762
16,354
16,758
16,455
Inventories
326
229
485
480
480
Trade receivables
7,664
8,539
9,153
10,296
11,384
Other current assets
3,107
3,947
7,336
7,336
7,336
Unbilled revenues
3,199
3,933
4,234
4,234
4,234
Available for sale investments
6,917
6,056
5,391
5,391
5,391
Current tax assets
741
977
649
900
900
Derivative assets
303
366
508
508
508
Cash and cash equivalents
8,484
11,420
15,894
23267
32206
Total current assets
30,740
35,469
43,649
52,411
62,438
Total assets
43,973
50,230
60,003
69,169
78,893
Equity
Share capital
493
493
493
493
493
Share premium
1,176
1,266
1,403
1,403
1,403
Retained earnings
25,918
31,495
37,225
45,036
53,704
Share based payment reserve
132
102
131
102
102
Other components of equity
717
1,047
1,545
1,545
1,545
Shares held by controlled trust
(54)
(54)
-
-
-
Equity attrib. to shareholders of Co.
28,381
34,350
40,789
48,580
57,247
Minority interest
117
139
165
165
165
Total equity
28,498
34,489
40,954
48,744
57,412
Liabilities
Long term loans and borrowings
85
1,091
1,271
1,271
1,271
Deferred tax liability
85
180
324
324
324
Derivative liabilities
12
63
16
16
16
Non-current tax liability
479
345
670
670
670
Other non-current liabilities
339
417
366
366
366
Provisions
1
1
1
1
1
Total non-current liabilities
1001
2096
2647
2647
2647
Loans and bank overdraft
6,296
4,068
6,621
6,621
6,621
Trade payables
4,807
5,226
5,875
6,969
7,705
Unearned revenues
1,035
1,277
1,655
1,655
1,877
Current tax liabilities
1,023
1,248
804
1,084
1,182
Derivative liabilities
98
250
75
75
75
Other current liabilities
1,099
1,439
1,222
1,222
1,222
Provisions
117
137
152
152
152
Total current liabilities
14,474
13,646
16,403
17,778
18,834
Total liabilities
15,475
15,742
19,050
20,425
21,481
Total equity and liabilities
43,973
50,230
60,003
69,169
78,893
February 23, 2016
10
Wipro | 3QFY2016 Result Update
Cash flow statement (Consolidated, IFRS)
Y/E March (` cr)
FY2013
FY2014
FY2015
FY2016E
FY2017E
Pre tax profit from operations
6,974
8,935
11,168
12,320
13,431
Depreciation
1,237
1,111
1,282
1,373
1,519
Expenses (deferred)/written off
(10)
(13)
(13)
(13)
(13)
Pre tax cash from operations
8,201
10,033
12,438
13,681
14,938
Other income/prior period ad
1,001
1,165
1,990
1,808
1,808
Net cash from operations
9,202
11,198
14,428
15,489
16,745
Tax
(1,835)
(2,260)
(2,462)
(2,710)
(2,955)
Cash profits
7,367
8,938
11,965
12,779
13,791
(Inc)/dec in current assets
47
(2,653)
(8,181)
(8,762)
(10,027)
Inc/(dec) in current liab.
2,706
(828)
2,757
1,375
1,056
Net trade working capital
2,752
(3,482)
(5,423)
(7,387)
(8,971)
Cashflow from oper. actv.
10,119
5,456
6,542
5,392
4,819
(Inc)/dec in fixed assets
(391)
(1,203)
(276)
(300)
(300)
(Inc)/dec in intangibles
1,570
(889)
(600)
-
-
(Inc)/dec in investments
(2,398)
594
(119)
-
-
(Inc)/dec in net def. tax assets
(164)
87
-
-
-
(Inc)/dec in derivative assets
341
(24)
-
-
-
(Inc)/dec in non-current tax asset
(2)
12
7
(7)
-
(Inc)/dec in minority interest
32
22
9
10
10
Inc/(dec) in other non-current liab
(49)
90
273
-
-
(Inc)/dec in other non-current ast.
104
(122)
(122)
-
-
Cashflow from investing activities
(957)
(1,667)
(826)
(297)
(290)
Inc/(dec) in debt
(2,166)
1,006
180
-
-
Inc/(dec) in equity/premium
(4,544)
(123)
314
4,013
6,145
Dividends
(1,736)
(1,736)
(1,736)
(1,736)
(1,736)
Cashflow from financing activities
(8,446)
(853)
(1,242)
2,277
4,409
Cash generated/(utilized)
717
2,936
4,474
7,372
8,939
Cash at start of the year
7,767
8,484
11,420
15,894
23,267
Cash at end of the year
8,484
11,420
15,894
23,267
32,206
February 23, 2016
11
Wipro | 3QFY2016 Result Update
Key Ratios
Y/E March
FY2013
FY2014
FY2015
FY2016E
FY2017E
Valuation ratio(x)
P/E (on FDEPS)
20.4
17.4
15.6
14.2
13.0
P/CEPS
10.1
8.3
7.6
6.7
6.1
P/BVPS
4.7
3.9
3.3
2.8
2.5
Dividend yield (%)
1.1
1.1
1.1
1.1
1.1
EV/Sales
3.2
2.7
2.5
2.0
1.7
EV/EBITDA
15.3
12.2
11.0
9.1
7.5
EV/Total assets
2.7
2.4
1.9
1.6
1.3
Per share data (`)
EPS (Fully diluted)
26.8
31.5
35.1
38.6
42.1
Cash EPS
54.1
66.3
72.1
81.1
89.1
Dividend
6.0
6.0
6.0
6.0
6.0
Book value
115.3
139.5
165.7
197.2
217.2
DuPont analysis
Tax retention ratio (PAT/PBT)
0.8
0.8
0.8
0.8
0.8
Cost of debt (PBT/EBIT)
7.7
9.1
8.7
9.0
8.8
EBIT margin (EBIT/Sales)
0.0
0.0
0.0
0.0
0.0
Asset turnover ratio (Sales/Assets)
0.9
0.9
0.8
0.8
0.7
Leverage ratio (Assets/Equity)
1.5
1.5
1.5
1.4
1.4
Operating ROE
23.5
22.8
21.3
19.8
18.3
Return ratios (%)
RoCE (pre-tax)
15.3
17.1
15.3
15.2
14.7
Angel RoIC
29.2
32.6
28.8
31.3
33.2
RoE
23.3
22.6
21.1
19.6
18.1
Turnover ratios (x)
Asset turnover(fixed assets)
0.9
0.9
0.9
0.8
0.8
Receivables days
77
68
69
69
70
Payable days
67
67
67
67
67
February 23, 2016
12
Wipro | 3QFY2016 Result Update
Research Team Tel: 022 - 39357800
E-mail: [email protected]
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Wipro
1. Analyst ownership of the stock
No
2. Angel and its Group companies ownership of the stock
No
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Buy (> 15%)
Accumulate (5% to 15%)
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over 12 months investment period):
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February 23, 2016
13