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Wipro Ltd (updated - 24 July 2010)
Wipro reported a consolidated revenue of Rs 7,191 crore, implying an annual growth of 3.1 per cent against the sequential 3.2 per cent — lower than its other major peers. Profit after tax increased 9.2 per cent sequentially to Rs 1,325 crore, on the back of a lower than expected tax incidence.

While there is a tendency to have a negative perception about this result, there are other factors that should be taken into consideration, according to analysts. Indeed, the companys guidance of four-six per cent is lower than its peers double-digit estimates. Its 4.7 per cent sequential volume growth was also lower than Infosys (6.9 per cent) and TCS (8.1 per cent).

Also, while price realisation increased 0.2 per cent sequentially, on-site pricing realisation declined five per cent in the same period. At the same time, offshore pricing realisation declined 1.4 per cent. The company as well as analysts attribute these reductions to a large system integration project, which is in a transition phase.

What has to be noted is that on-site volumes saw astrong growth of around 16 per cent sequentially. In addition, the management mentioned there was supposed to be a change in employee costs and this was expected to positively impact margins by a percentage point in the second quarter of the current financial year. The strong point for Wipro would be its growth in the manufacturing sector, along with the energy & utilities segment, even as the company loses some market share.
Regaining its presence in the healthcare sector could be a trigger.
source - business standard

Wipro Ltd (updated - 27 April 2010)
Wipro reported a 6 per cent rise in gross revenues for 200910 at Rs 27,124 crore. Revenues during the fourth quarter ended March 2010 rang in at Rs 6,983 crore, up 8 per cent year-on-year (y-o-y), but flat sequentially. In terms of revenues, the company has underperformed its peers, Infosys and HCL Technologies, but is at par with TCS.

In constant currency terms, the information technology (IT) services revenues grew 7.8 per cent y-o-y and 4.7 per cent sequentially to $1.18 billion on 4.1 per cent volume growth. Sequential revenue growth in the fourth quarter of 2009-10 for the financial services vertical came in at 5 per cent, while technology and telecom verticals saw traction in revenue growth (6 per cent and 7 per cent, respectively). Healthcare segment revenues surged 9per cent, while manufacturing and technology, media and telecom verticals revenues saw a muted growth of about 1.5 per cent collectively.

Operating profits surged 14 per cent y-o-y to Rs 6,423 crore in 2009-10 and were 16 per cent higher (y-o-y) at Rs 1,588 crore in the March quarter. Earnings before interest, tax, depreciation and amortisation (Ebitda) margins surged 170 basis points y-o-y. “The margin increase was a little surprising, as it happened in the backdrop of rupee appreciation and additional headwinds from wage hikes,” states Ambit Research.

Wipro instituted wage hikes for offshore (8-10 per cent) and onsite (2-3 per cent) employees in the fourth quarter. However, this did not dent margins much as it was reflected for a part of the quarter. The company is unlikely to do another round of hikes, but will react to market requirements.

Going ahead, the management suggests unless there are huge currency swings, operating margins will stay within a narrow range to these numbers. For the first quarter of FY11, Wipro pegs the revenue at $1,190-1,215 million, up 2.14.2 per cent sequentially.

The stock surged after the announcements of results and 2:3 bonus issue, but ended down 1.42 per cent on Friday. It recovered some lost ground on Monday, ending aper cent higher at Rs 699.10 and trades at about 20x consensus analyst FY11 earnings per share estimates.
source - business standard

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Wipro Ltd (updated - 26 Oct 2010)
Wipro anticipated last year’s slowdown ahead of the pack and effectively countered it with cost-control measures, but hasn’t been as effective in reaping the benefits of the demand rebound. While Infosys and TCS saw strong sequential revenue growth, Wipro disappointed with middling numbers in the September quarter, for the fifth time in a row.

Constant currency revenues for information technology (IT) services increased 5.7 per cent sequentially to $1,261.2 million, compared to the aboveguidance revenue growth of 11.7 per cent for TCS and 10.2 per cent for Infosys.

It also reported a 250-basis-point (bp) operating margin compression to 22.2 per cent for IT services, attributed to salary hikes and lower forex gains. This contrasted with a 194 bps and a86 bps sequential margin expansion for Infosys and TCS, respectively.

The problem for Wipro stems from its relatively lower exposure to banking and financial services (BFSI) compared to peers, which benefited from a return of discretionary spending by clients in this space, reckons an Edelweiss research report, besides its relatively lower US revenue base.

For Wipro, growth came from the retail segment (9.7 per cent sequential rise), while the BFSI segment, which contributes 27 per cent to revenues, grew 5.7 per cent. Europe saw strong growth of over 10 per cent, helped by favourable currency moves.

With fewer cost-side levers, given supply-side pressure through high attrition at 19.4 per cent (16 per cent in the previous quarter) and industry-wide wage hikes, revenues will be the key to margins. Therefore, the muted guidance of 3.5-5.5 per cent sequential increase in revenues to $1,317-1,343 million was a dampener, as compared to TCS, which will see price increases in the next financial year.

The stock has fallen over eight per cent since the results on Friday to `430.3, aligned with downgrades in earnings estimates. It trades at a price to earnings valuation of about 19.4x consensus 2010-11 earnings per share estimates.
source - business standard