The management is optmistic that H2FY15 will be stronger. K Kurien, executive director & chief executive officer sees good momentum in large deals. He expects H2FY15 (October-March) to be better than H1FY15. According to him, the current demand environment is better than last year.
Prabhudas Lilladher advises to buy Wipro despite its July-September quarter underperforming peers in dollar revenue growth. The brokerage has a target price of Rs 650 per share stating that improvement in win rate may drive revenue momentum in CY15, along with available margin levers that would accelerate earnings momentum. However, it also quickly warns that there could be near term weakness in the stock due to weaker-than-expected guidance.
The management is optmistic that H2FY15 will be stronger. K Kurien, executive director & chief executive officer sees good momentum in large deals. He expects H2FY15 (October-March) to be better than H1FY15. According to him, the current demand environment is better than last year (Read management interview here )
"The management is still confident of improving growth momentum in H2FY15 on the back of large deal wins. Moreover, return of discretionary spend in the US and Outsourcing penetration in Continental Europe makes demand outlook healthier," Prabhudas Lilladher said in a note.
Wipro underperformed its peers in dollar revenue growth. TCS had reported 6.4 percent, Infosys 3.19 percent and HCL Technologies 1.9 percent growth in dollar revenue on sequential basis.
IT services revenue in rupee terms grew by 4 percent quarter-on-quarter (up 8.5 percent on yearly basis) to Rs 10,923 crore during the quarter. IT services revenue (non-GAAP constant currency) in dollar terms climbed 1.8 percent sequentially (up 8.6 percent year-on-year) to USD 1,771.5 million, which was within the company's guidance range of USD 1,770 million to USD 1,810 million but lower than estimates of USD 1,783 million (according to the average of estimates of analysts polled by CNBC-TV18).
The software services firm's second quarter net profit declined nearly 1 percent sequentially (up 8 percent year-on-year) to Rs 2,098.3 crore dented by higher tax and finance expenses, and reconciling items. Profit in the previous quarter was Rs 2,118 crore.
The stock closed at Rs 560.75, down Rs 20.95 or 4 percent in Mahurat trading on Thursday.
Posted by Nasrin Sultana
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