Wipro Ltd WIPRO) - Moneycontrol.comstatic-news.moneycontrol.com/.../04/Wipro_19042019.pdf · |...

ICIC

I S

ecurit

ies –

Retail E

quit

y R

esearch

Result

Update

April 18, 2019

CMP: | 285 Target: | 315 ( 11%) Target Period: 12 months

Wipro Ltd (WIPRO)

BUY

Growth likely to be more back ended…

Wipro’s revenues grew 1.4% QoQ mainly led by 6.3% QoQ growth in digital

revenues. However, pressure in traditional revenues arrested the growth.

Besides digital, growth was supported by consumer business unit (grew

5.3% QoQ in CC terms) followed by healthcare and BFSI. We expect growth

to accelerate in the next two years with room for margin revision upwards

from 18.3% estimated in FY21E.

Slow start, growth to pan out in subsequent quarters

Completion of some large projects and slower than expected ramp up in

certain projects accompanied with Q1 seasonality have made the company

pen down a CC guidance of -1% to 1% for Q1FY20E. However post

Q1FY20E, pick up in order pipeline coupled with turnaround in

communication and technology verticals is expected to drive growth in

FY20E. BFSI would continue its momentum but the growth is expected to

moderate compared to 16.1% YoY growth in FY19. Further, healthcare and

manufacturing verticals are expected to improve in each in H2FY20E

creating a stronger growth exit for FY21E.

Digital, deal pipeline to drive growth beyond FY19

Digital revenue was the main growth driver for the company in FY19. Its

contribution in overall revenue pie continues to rise (34.8% of revenue in

Q4FY19 vs. 26.7% in Q4FY18). Transforming legacy to digital, increased

focus on cloud infra and platforms is anticipated to drive digital momentum.

Growth in digital coupled with strong order intake (double digit growth YoY)

and positive commentary on pipeline, we expect Wipro to clock in 7.5%

CAGR to US$9379 million in FY19-21E.

Room for upside in margin estimates

For FY19, IT services EBIT margin stood at 18%. Going ahead, margins in a

narrow band of 18% looks sustainable. Although we expect margins in

Q1FY20E to be lower due to wage hikes, we expect margins to recoup from

Q2FY20E onwards. We expect IT services EBIT margin of 18.1%, 18.3% in

FY20E, FY21E, respectively. However, with recovery in high margin verticals

and easing of pressure in traditional services could result in upward revision

of margins for FY21E.

Valuation & Outlook

Continued strength in digital and healthy deal pipeline commentary would

act as the main growth drivers for Wipro. Additionally, room for margin

revision, healthy capital allocation policy and reasonable valuation prompt

us to recommend BUY on Wipro. Hence, we revise target price to | 315 per

share (~16x FY21E EPS).

Key Financial Summary

s

Key Financials FY17 FY18 FY19E FY20E FY21E CAGR (FY19-21E)

Net Sales 55,040 54,636 58,052 62,929 67,944 8.2%

EBITDA 11,458 10,542 11,938 13,370 14,569 10.5%

EBITDA Margins (%) 20.8 19.3 20.6 21.2 21.4

Net Profit 8,490 8,008 9,003 10,449 11,709 14.0%

EPS (|) 17.5 12.7 14.9 17.3 19.4

P/E 16.2 22.5 19.0 16.4 14.6

RoNW (%) 16.3 16.6 15.8 16.7 17.0

RoCE (%) 16.9 16.9 17.8 18.1 18.4

Source: Company, ICICI Direct Research

Particulars

Particular Amount

Market Capitalization (| Crore) 171,635.7

Total Debt (| Crore) 9,946.7

Cash and Investments (| Crore) 38,417.6

EV (| Crore) 143,164.8

52 week H/L 297 / 190

Equity capital 1,207

Face value | 2

Key Highlights

Healthy deal pipeline commentary

and digital signals healthy revenue

acceleration in next two years

Digital with growth of 31% YoY in

FY19, one of the key driver for growth

Expect IT service margins in range of

~18% as sustainable.

Revise our recommendation from

Hold to Buy with a revised target

price of | 315

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

Q4FY19 Q4FY19E Q4FY18 YoY (%) Q3FY19 QoQ (%) Comments

Revenue 15,006 15,043 13,769 9.0 15,060 -0.4

Revenue de-grew 0.4% QoQ on the back of rupee

appreciation and volatile IT products division which

declined 12.3% QoQ

Employee expenses 10,426 10,332 9,779 6.6 10,289 1.3

Gross Margin 4,581 4,711 3,989 14.8 4,771 -4.0

Gross margin (%) 30.5 31.3 29.0 155 bps 31.7 -115 bps

Selling & marketing costs 1,099 1,034 1,126 -2.4 1,189 -7.5

G&A expenses 667 833 980 -32.0 698 -4.4

EBITDA 3,292 3,300 2,509 31.2 3,384 -2.7

IT services EBIT margin declined 60 bps to 19.2%

mainly on account of rupee appreciation (-0.4%

impact) and salary increments to some employees

EBITDA Margin (%) 21.9 21.9 18.2 372 bps 22.5 -54 bps

Depreciation 446 451 570 -21.8 449 -0.8

EBIT 2,732 2,849 1,939 40.9 2,867 -4.7

EBIT Margin (%) 18.2 18.9 14.1 413 bps 19.0 -83 bps

Other income 470 417 324 45.0 374 25.8

PBT 3,202 3,266 2,262 41.5 3,240 -1.2

Tax paid 706 719 462 53.1 697 1.4

PAT 2,483 2,544 1,803 37.7 2,510 -1.1

Key Metrics

Closing employee Count 171,425 173,000 159,923 7.2 172,379 -0.6

TTM voluntary Attrition (%) 17.6 17.7 16.8 80 bps 17.9 -30 bps Attrition still at elevated levels

Utilisation ex trainees (%) 85.4 83.5 83.4 200 bps 83.2 220 bps

Average $/| 70.3 70.8 65.0 8.1 71.7 -1.9


Exhibit 2: Change in estimates

FY19 Comments

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

Revenue 58,052 63,232 62,929 -0.5 68,267 67,944 -0.5

EBITDA 11,938 13,069 13,370 2.3 14,177 14,569 2.8

EBITDA Margin (%) 20.6 20.7 21.2 55 bps 20.8 21.4 65 bpsChange in margin estimates on the back

of revision in IT service margin estimates

PAT 9,003 10,277 10,449 1.7 11,302 11,709 3.6

EPS (|) 14.9 17.1 17.3 1.7 18.8 19.4 3.6

FY20E FY21E





Conference Call Highlights

Management guidance: Wipro guided that its Q1FY20E IT services

revenues would be in the range of $2046-2087 million, which translates

to -1.4% to 0.6% QoQ growth. However, excluding the impact of the

divestment of its Workday and Cornerstone on demand business

(concluded in Q4FY19), growth guidance translates to -1% to 1%. The

muted guidance is on account of Q1 seasonality, completion of some

large projects and delay in certain projects to the following quarters

Margins outlook: Margins in Q1FY20E are expected to be impacted by

salary increments to be done from June 1, 2019. For FY19, IT services

EBIT margin was at 18%. Going ahead, margins in a narrow band of 18%

look sustainable. However, a recovery in high margin verticals and

pressure in traditional services coming down could result in upward

revision of margins for FY21E

Healthcare: With 13.2% of revenue, the healthcare division witnessed

sequential growth of 2.1% in the quarter. Going forward, the

management said the vertical is expected to remain soft on account of

headwinds and uncertainty in the segment due to HPS weakness,

especially in H1FY20E

Other verticals: BFSI (31.5% of revenue) and consumer business unit

(16.2% of revenue) proved to be the main growth drivers among

verticals as they grew 16.1% YoY and 9.8% YoY in constant currency in

FY19. Providing colour on verticals for the next year, the management

expects continued momentum in BFSI, consumer business unit and

energy & utilities. However, growth in BFSI would moderate in FY20E

(vs. FY19) on account of some softness in capital markets segment,

Wipro’s major presence within banking. An uptick is anticipated in

communication and technology verticals while healthcare &

manufacturing are expected to be soft in H1FY20E

Digital revenues: Digital business continues to ride on upward

trajectory, constituted 34.8% of revenue (vs. 26.7% in Q4FY18) and grew

31% YoY in Q4FY19 in dollar terms

Employee details: The company's closing employee count in FY19 was

at 171,425 (vs. 159,923 in FY18). Net utilisation (ex-trainees) increased

220 bps QoQ to 85.4% and was one of the driver to keep margins in

check in the quarter. In terms of attrition rate, voluntary attrition (TTM)

declined 30 bps QoQ to 17.6%. In terms of visa concerns, Wipro has

limited onsite risk as 64% of its workforce in US are locals

Payout policy: The company intends to maintain payout policy of 45-

50% of PAT




Key Metrics

Exhibit 3: Geography-wise split up

Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19

Revenue by geography (%)

Americas 54.1 53.8 56.0 56.1 57.1 58.2

Europe 26.5 27.5 26.1 25.7 25.5 24.6

RoW 19.4 18.8 17.9 18.2 17.4 17.2

Growth QoQ (%)- Constant currency

Americas -0.7 1.6 2.9 3.7 3.7 3.1

Europe 4.7 2.7 -3.0 0.9 2.7 -3.0

RoW -0.5 -1.2 1.1 7.9 -2.3 0.3


Exhibit 4: Vertical-wise split up


Revenue by strategic business units (%)

Communications 6.5 5.9 5.7 5.8 5.8 5.7

BFSI 28.3 28.7 29.8 30.5 31.4 31.5

Manufacturing 8.8 8.9 8.4 8.3 8.1 8.0

Technology 14.3 14.6 14.5 13.9 13.0 12.6

Health Business Unit 14.3 14.2 13.6 13.0 13.1 13.2

Consumer Business Unit 15.1 15.0 15.3 15.7 15.6 16.2

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


Communications -0.7 -8.1 -1.3 4.2 2.1 -1.2

BFSI 4.4 3.0 3.0 4.4 5.3 1.3

Manufacturing 0.0 2.9 -5.4 1.7 0.4 -0.7

Technology 0.0 0.0 -1.3 1.8 -4.2 -2.0

Health Business Unit 2.5 0.6 -4.7 -3.0 2.8 2.1

Consumer Business Unit 1.2 -1.0 2.6 4.8 1.4 5.3

Energy,Natural Resources & Utilities -6.1 1.6 1.7 4.0 4.6 -0.7


Exhibit 5: Exhibit 5: Service line wise break-up


Revenue by service lines (%)

Cloud Infrastructure Services 27.3 27.6 26.3 25.6 25.0 25.2

Data, Analytics & AI 7.1 7.1 7.2 7.8 7.6 7.6

Digital operations and Platforms 12.9 12.4 12.4 12.9 14.7 14.9

Industrial & Engineering Services 7.0 7.4 7.4 7.4 7.1 7.2

Modern Application Services 45.7 45.5 46.7 46.3 45.6 45.1


Cloud Infrastructure Services 0.4 3.4 -4.6 2.6 -0.2 2.3

Data, Analytics & AI -0.4 1.7 1.5 11.1 -0.9 1.3

Digital operations and Platforms 4.7 -2.5 -0.6 6.2 16.2 2.3

Industrial & Engineering Services -0.3 7.4 -1.1 1.9 -2.0 1.7

Modern Application Services 0.6 -0.3 3.3 1.0 1.1 -0.2


Among geography, growth was led by Americas

while Europe was weak

See continued momentum in BFSI, consumer

business unit and E&U in FY20E with growth

moderation in BFSI

Uptick expected in Communication and Technology

Healthcare and Manufacturing could remain soft

specifically in H1FY20E




Exhibit 6: Client & human resource matrix


Client metrics

$1 mn Clients 599 595 595 584 578 571

$10 mn Clients 167 171 171 177 171 172

$50 mn Clients 41 39 40 39 41 41

$75 mn Clients 17 20 19 19 19 22

$100 mn Clients 9 8 8 9 10 10

Headcount, Utilization & Attrition

Closing employee count 158865 159923 160846 171451 172379 171425

Net Utilization (Excluding trainees) 81.9 83.4 85.2 85.5 83.2 85.4

Voluntary Attrition LTM 16.1 16.8 17.1 17.5 17.9 17.6


Three clients added in US$75 mn+ category taking

the count to 22




Financial story in charts

Exhibit 7: Digital grew strong at 31.2% YoY in Q4FY19

21.7 22.1 22.524.1 25.0

26.728.0

31.433.2

34.8

9.9

4.62.7

9.4

3.7

9.4

1.1

13.3

7.76.3

0.0

10.0

20.0

30.0

40.0

Q3FY17

Q4FY17

Q1FY18

Q2FY18

Q3FY18

Q4FY18

Q1FY19

Q2FY19

Q3FY19

Q4FY19

%

Digital as a % of revenue Growth, QoQ


Exhibit 8: Dollar revenues may grow at 7.5% CAGR in FY19-21E

7082

7346

7704

1971

2014

2013

2062

8060

1989

2010

2047

2076

8120 8

682

9379

7.0

3.7

4.9

2.1

5.1

5.85.5

4.6

0.91.7

0.7 0.8

6.98.0

0

3

6

9

1000

4000

7000

10000

FY15

FY16

FY17

Q1FY18

Q2FY18

Q3FY18

Q4FY18

FY18

Q1FY19

Q2FY19

Q3FY19

Q4FY19

FY19

FY20E

FY21E

%

$ m

illion

Dollar revenue Growth, YoY


Exhibit 9: Change in margin estimates for FY20E and FY21E

22.1

20.5

17.9

16.817.3

14.814.4

15.7

17.5

13.0

19.819.2

18.0 18.1 18.3

12

15

18

21

24

FY15

FY16

FY17

Q1FY18

Q2FY18

Q3FY18

Q4FY18

FY18

Q1FY19

Q2FY19

Q3FY19

Q4FY19

FY19

FY20E

FY21E

%

EBIT margin (IT services)


Digital business continues to ride on upward

trajectory and constituted 34.8% of revenue (vs.

26.7% in Q4FY18) and grew 31% YoY in Q4FY19




Exhibit 10: PAT trend

8653 88868490

2076 2191 1937 1803

8008

21211650

2510 2483

9003

10449

11709

1000

4000

7000

10000

13000FY15

FY16

FY17

Q1FY18

Q2FY18

Q3FY18

Q4FY18

FY18

Q1FY19

Q2FY19

Q3FY19

Q4FY19

FY19

FY20E

FY21E

| crore

PAT


Exhibit 11: One year forward rolling PE

0

200

400

600

800

1000

Apr-10

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

|

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) 16.3 13.1 16.3 16.9

FY18 54,636 (0.7) 12.7 (27.5) 22.5 14.8 16.6 16.9

FY19 58,052 6.3 14.9 18.1 19.1 12.0 15.8 17.8

FY20E 62,929 8.4 17.3 16.1 16.4 10.2 16.7 18.1

FY21E 67,944 8.0 19.4 12.1 14.7 8.9 17.0 18.4





Exhibit 13: Recommendation History vs. Consensus

0.0

20.0

40.0

60.0

80.0

100.0

0

200

400

600

800

1,000

Apr-

19

Feb-

19

Jan-

19

Nov-

18

Oct-

18

Aug-

18

Jul-

18

May-

18

Apr-

18

Feb-

18

Dec-

17

Nov-

17

Sep-

17

Aug-

17

Jun-

17

May-

17

Mar-

17

Jan-

17

Dec-

16

Oct-

16

Sep-

16

Jul-

16

Jun-

16

Apr-

16

Mar-

16

(%

)

(|)

Price Idirect target Consensus Target Mean % Consensus with HOLD

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) 31-Dec-18 60.4% 3,630.4 0.0

2 Azim Premji Trust 8-Mar-19 13.3% 797.9 -26.7

3 Life Insurance Corporation of India 31-Dec-18 4.3% 259.2 43.9

4 Stewart Investors 20-Dec-17 1.3% 77.1 -5.3

5 BlackRock Institutional Trust Company, N.A. 31-Mar-19 1.0% 61.9 0.6

6 The Vanguard Group, Inc. 28-Feb-19 0.6% 33.3 0.0

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

8 Dimensional Fund Advisors, L.P. 28-Feb-19 0.4% 24.3 -0.4

9 Azim Premji Philanthropic Initiatives Pvt. Ltd. 31-Dec-18 0.3% 20.8 0.0

10 SBI Funds Management Pvt. Ltd. 28-Feb-19 0.3% 20.0 0.5

Source: Reuters, ICICI Direct Research

Exhibit 15: Recent Activity

Investor name Value Shares Investor name Value Shares

Life Insurance Corporation of India 156.7m 43.9m Azim Premji Trust -98.2m -26.7m

Norges Bank Investment Management (NBIM) 10.5m 2.9m T. Rowe Price International (UK) Ltd. -41.7m -12.5m

Mirae Asset Global Investments (Hong Kong) Limited 9.2m 2.7m T. Rowe Price Hong Kong Limited -22.6m -6.8m

SEB Investment Management AB 7.2m 1.8m Axis Asset Management Company Limited -14.1m -3.6m

Unigestion 6.2m 1.6m Evli Fund Management Company Ltd. -3.8m -1.1m

Buys Sells

Source: Reuters, ICICI Direct Research

Exhibit 16: Shareholding Pattern

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

Promoter 74.31 74.30 74.29

Public 25.21 25.24 25.25

Others 0.48 0.47 0.45

Total 100.00 100.01 100.00





Financial summary

Exhibit 17: Profit and loss statement | crore

FY18 FY19 FY20E FY21E

Total Revenues 54,636 58,052 62,929 67,944

Growth (%) (0.7) 6.3 8.4 8.0

COGS 38,558 41,303 43,434 46,885

Other Expenditure 5,537 6,099 6,157 6,522

EBITDA 10,542 11,938 13,370 14,569

Growth (%) (8.0) 13.2 12.0 9.0

Depreciation 2,112 1,947 2,110 2,278

Other Income 2,400 2,292 2,897 3,483

Exchange difference - - - -

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

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

PBT 10,247 11,542 13,415 15,032

Growth (%) (7.1) 12.6 16.2 12.1

Tax 2,239 2,524 2,951 3,307

PAT before Minority int, 8,008 9,017 10,464 11,725

Minority int. 0 14 15 16

PAT 8,008 9,003 10,449 11,709

EPS 12.7 14.9 17.3 19.4

EPS (Growth %) (27.5) 18.1 16.1 12.1


Exhibit 18: Cash flow statement | crore


PAT before minority int. 8,008 9,017 10,464 11,725

Depreciation 2,112 1,947 2,110 2,278

(inc)/dec in Current Assets (717) (150) 399 (1,352)

(inc)/dec in current Liabilities 623 2,867 4,750 2,043

Taxes paid (2,811) (2,515) (2,951) (3,307)

CF from operations 8,423 11,632 15,568 11,953

Other Investments 5,628 4,486 7,384 10,866

(Purchase)/Sale of Fixed Assets (2,070) (2,084) (2,391) (2,582)

CF from investing Activities 3,558 5,013 506 901

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

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

Dividend & Divendend tax (854) (1,023) (6,462) (12,469)

CF from Financial Activities (12,998) (4,937) (5,439) (6,007)

Exchange rate differences 38 53 - -

Opening cash balance 5,271 4,493 15,853 26,487

Closing cash 4,493 16,252 26,487 33,335

*calculated, Source: Company, ICICI Direct Research

Exhibit 19: Balance sheet | crore


Liabilities

Equity 905 1,207 1,207 1,207

Reserves & Surplus 47,389 55,605 61,352 67,792

Networth 48,294 56,812 62,558 68,998

Minority Interest 241 264 279 294

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

Debt - short term 9,299 7,110 10,740 11,596

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 78,393 85,704

Assets

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

Intangible Assets 1,811 1,376 1,396 1,417

PPE 6,444 7,060 7,321 7,604

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

Investments 887 815 811 807

Debtors 10,544 10,486 11,410 12,231

Cash & Cash equivalents 4,493 15,853 26,487 33,335

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

O.current assets 10,992 8,724 7,401 7,932

Trade Payable 6,813 8,830 9,614 10,424

OCL & Provisions 5,239 5,495 5,822 6,199

Application of funds 64,012 68,992 78,393 85,704


Exhibit 20: Key ratios | crore


Per share data (|)

EPS 12.7 14.9 17.3 19.4

BV 76.3 94.3 103.9 114.6

DPS 2.0 1.0 6.2 7.0

Operating Ratios

EBIT Margin 15.4 17.2 17.9 18.1

PAT Margin 14.7 15.5 16.6 17.2

Debtor days 70 66 66 66

Creditor days 46 56 56 56

Return Ratios (%)

RoE 16.6 15.8 16.7 17.0

RoCE 16.9 17.8 18.1 18.4

RoIC 24.4 32.7 38.4 41.2

Valuation Ratios (x)

P/E 22.5 19.1 16.4 14.7

EV / EBITDA 14.8 12.0 10.2 8.9

EV / Net Sales 2.9 2.5 2.2 1.9

Market Cap / Sales 3.1 3.0 2.7 2.5

Price to Book Value 3.7 3.0 2.7 2.5

Solvency Ratios

Debt/EBITDA 1.3 0.8 1.0 1.0

Debt / Equity 0.3 0.2 0.2 0.2

Current Ratio 1.8 1.3 1.2 1.2

Quick Ratio 1.8 1.3 1.2 1.2





Exhibit 21: ICICI Direct coverage universe (IT)

CMP M Cap

(|) TP(|) Rating (| Cr) FY18 FY19E FY20E FY18 FY19E FY20E FY18 FY19E FY20E FY18 FY19E FY20E FY18 FY19E FY20E

Cyient (INFENT) 587 675 Buy 6,857 36.0 39.1 44.1 16.9 15.6 13.8 10.9 8.5 7.7 21.4 20.6 21.2 17.3 16.9 17.2

Eclerx (ECLSER) 1,133 910 Sell 3,931 72.9 58.9 64.2 14.2 17.5 16.1 9.1 11.1 9.9 28.2 22.8 23.1 24.1 17.3 17.5

Firstsource (FIRSOU) 49 55 Buy 3,296 4.8 5.1 5.6 10.1 9.3 8.6 8.3 7.1 6.2 13.0 14.1 15.6 13.9 13.8 13.6

HCL Tech (HCLTEC) 1,094 1,090 Hold 137,478 62.6 73.0 80.1 11.7 9.5 8.2 2.6 2.2 1.9 29.0 34.4 38.2 27.4 31.9 31.4

Infosys (INFTEC) 716 805 Buy 314,663 32.3 35.4 39.5 22.4 20.4 18.3 15.2 13.8 12.3 30.9 32.9 32.9 22.5 23.7 24.4

L&T Intotech (LTINFO) 1,654 1,950 Buy 28,870 64.7 87.0 96.6 25.7 19.1 17.2 22.9 14.3 12.1 36.0 40.6 36.9 28.8 31.2 28.3

NIIT Tech (NIITEC) 1,314 1,415 Buy 7,705 45.6 67.8 76.3 27.8 18.7 16.6 13.8 10.3 8.6 19.4 24.8 24.6 15.8 20.5 20.2

Persistent (PSYS) 629 630 Hold 4,615 40.5 45.3 49.8 14.3 12.7 11.6 8.1 5.9 5.3 19.8 20.8 20.4 15.2 15.2 15.0

TCS (TCS) 2,145 2,065 Hold 775,500 67.4 83.8 88.6 30.6 24.6 23.3 22.5 18.6 16.8 37.6 43.8 43.1 29.6 34.4 34.0

Tech M (TECMAH) 806 900 Buy 71,253 42.8 48.0 55.3 18.8 16.7 14.5 14.1 9.8 8.3 21.5 22.0 22.4 20.2 19.5 19.5

Wipro (WIPRO) 285 315 Buy 171,636 12.7 14.9 17.3 22.5 19.1 16.4 14.8 12.0 10.2 16.9 17.8 18.1 16.6 15.8 16.7

EV/EBITDA (x)P/E (x)

Sector / Company

RoE (%)RoCE (%)EPS (|)





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 Strong

Buy, Buy, Hold 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: >10%/15% for large caps/midcaps, respectively;

Hold: Up to +/-10%;

Sell: -10% or more;

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

[email protected]




ANALYST CERTIFICATION

I/We, Devang Bhatt, PGDBM, Deepti Tayal, MBA, Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the

subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. It is also confirmed that above mentioned

Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months and do not serve as an officer, director or employee of the companies mentioned in the report.

Disclaimer in retail research report:

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Research Analyst with SEBI Registration Number – INH000000990. ICICI Securities Limited SEBI Registration is INZ000183631 for stock broker. ICICI Securities is a subsidiary of ICICI Bank which is India’s largest private sector bank

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Recommendation in reports based on technical and derivative analysis centre on studying charts of a stock's price movement, outstanding positions, trading volume etc as opposed to focusing on a company's fundamentals and, as

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Our proprietary trading and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein.

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