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Wipro Limited (WIT)

  • Fri, Jan. 16, 11:24 AM
    • Range-bound Wipro (NYSE:WIT) is up strongly after posting in-line FQ3 EPS to go with a slight revenue miss, and guiding for FQ4 IT services revenue of $1.814B-$1.850B. Consensus for total FQ4 revenue is at $1.98B.
    • The IT outsourcing giant has also announced CFO Suresh Senapaty will retire on March 31. Finance SVP Jatin Dalal will succeed him.
    • IT services revenue totaled $1.795B in FQ3, up 7% Y/Y but slightly missing guidance of $1.808B-$1.842B. IT products revenue totaled $123M. 44 new IT Services customers were added vs. 50 in FQ2.
    • FQ3 results, PR (.pdf)
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  • Dec. 18, 2014, 1:14 PM
    • In addition to beating FQ1 estimates, Accenture (ACN +4.3%) has hiked its guidance for FY15 (ends Aug. '15) local currency revenue growth to 5%-8% from 4%-7%. On the other hand, forex is now expected to have 500 bps impact on revenue, up from a prior 200 bps.
    • As a result, FY15 EPS guidance has been lowered to $4.66-$4.80 from $4.74-$4.88 - consensus is at $4.81 - and FQ2 revenue guidance of $7.25B-$7.5B is mostly below a $7.46B consensus. The market appears to have discounted forex pressures in advance.
    • FQ1 new bookings totaled $7.7B, down from $8.7B a year ago. Consulting bookings fell to $3.9B from $4.3B, and outsourcing bookings to $3.8B from $4.4B.
    • Gross margin fell 110 bps Y/Y to 32.2%, but cost controls helped SG&A spend fall to 17.1% of revenue from 18.7%. As a result, op. margin rose 20 bps to 15%. $670M was spent on buybacks.
    • North America revenue +11% to $3.44B; Europe +5% to $2.91B; "Growth Markets" +3% to $1.55B. Forex respectively had 400 bps and 600 bps impacts on Europe and Growth Markets revenue growth.
    • Accenture has made new highs. Outsourcing rivals Infosys (INFY +3%), Wipro (WIT +4.9%), and Cognizant (CTSH +4.3%) are also outperforming on a good day for equities.
    • FQ1 results, PR
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  • Dec. 15, 2014, 5:37 PM
    • Top gainers, as of 5:15 p.m.: IAG +10.8%. PRTA +10.7%. AG +9.5%. NGD +7.2%. CDE +7.1%.
    • Top losers, as of 5:15 p.m.: BBEP -2.9%. DGII -2.3%. VIIX -1.8%. WIT -1.6%. NOW -1.3%.
  • Oct. 22, 2014, 12:41 PM
    • Wipro (WIT -3.2%) expects FQ3 IT services revenue (responsible for 94% of FQ2 revenue) of $1.808B-$1.842B. The company's total FQ3 revenue consensus is at $1.99B.
    • IT services revenue growth slipped to 8.6% in FQ2 from 9.6% in FQ1. Wipro notes the benefits of a weak rupee were offset by the dollar's strength against other currencies.
    • Gross margin fell 30 bps Y/Y to 30.8%. G&A spend rose 16% to $107M; sales/marketing spend was nearly flat at $123M.
    • FQ2 results, PR (.pdf)
    | Comment!
  • Aug. 6, 2014, 9:43 AM
    • Though its Q2 revenue was in-line, Cognizant (NASDAQ:CTSH) expects Q3 revenue of $2.55B-$2.58B and EPS of $0.63+ vs. a consensus of $2.66B and $0.60. Full-year guidance is for 14%+ revenue growth and EPS of $2.54+ vs. a consensus for 16.9% growth and EPS of $2.38.
    • The company blames its top-line softness on "weakness at certain clients and longer than anticipated sales cycles for certain large integrated deals." The IT outsourcing industry in general has been pressured by a growing customer preference for smaller deals, and (in certain segments) the adoption of cloud services.
    • Gross margin fell 70 bps Y/Y to 40.4%, and SG&A spend rose 15% to $483M. Cognizant spent over $100M on buybacks, and has increased its buyback authorization by $500M; $900M remains available under the company's buyback program.
    • Peers Infosys (INFY -4.2%), Wipro (WIT -2.5%), and Accenture (ACN -1.5%) are also trading lower. Infosys dropped last month after providing cautious remarks about near-term demand to go with an EPS beat.
    • Q2 results, PR
    | 1 Comment
  • May 23, 2014, 2:43 PM
    • With shares remaining below $12 following a post-earnings April selloff, Barclays has upgraded Wipro (WIT +2.6%) to Equal Weight.
    • Though Wipro beat Q1 estimates last month, disappointment with guidance for Q2 IT services revenue of $1.715B-$1.755B led shares to fall. They've underperformed Indian peers that have been rallying on election-related hopes.
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  • Mar. 13, 2014, 4:01 PM
    • Aided today by a broader market selloff, Infosys (INFY -2.7%) has fallen 9% since the company hosted an investor meeting yesterday at its Bangalore HQ. Chairman Narayana Murthy stated at the event his company is likely to see 11.5% FY14 (ends March '14) revenue growth, at the low end of a prior guidance range of 11.5%-12%.
    • Peers Wipro (WIT -2.8%) and Cognizant (CTSH -2%) are also down over 2%. Nomura argues Infosys is contending with company-specific issues, including skill mismatches and client project ramp-downs/cancellations. It also thinks Infosys might have higher exposure to discretionary projects at retail clients.
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  • Feb. 5, 2014, 11:46 AM
    • Cognizant (CTSH -5.1%) has guided for Q1 revenue of at least $2.42B and EPS of $1.18 vs. a consensus of $2.42B and $1.10. However, full-year guidance is more mixed: Cognizant expects revenue of at least $10.3B and EPS of at least $5.02 vs. a consensus of $10.38B and $4.77.
    • The company has also announced a 2-for-1 stock split. Shares will begin trading on a post-split basis on March 8.
    • 5K workers were added in Q4, raising Cognizant's total headcount to 171.4K. SG&A spend +12.1% Y/Y to $450.5M, less than revenue growth of 20.9%.
    • Rivals Infosys (INFY -1.7%) and Wipro (WIT -1.3%) are following Cognizant lower.
    • Q4 results, PR
    | Comment!
  • Jan. 17, 2014, 9:13 AM
  • Jan. 10, 2014, 11:48 AM
    • Infosys (INFY +5.3%) has jumped to levels last seen in early 2012 after posting strong FQ3 results and upping its FY14 (ends March '14) revenue growth forecast to 11.5%-12% from a prior 9%-10%. Rival Wipro (WIT +2.7%) is also higher.
    • Infosys' CC commentary (transcript) was moderately upbeat. CEO S.D. Shibulal says his company's business environment "has improved marginally in most business segments" and that clients are "becoming more confident about spending." But he adds customers "remain careful" with regards to spending decisions, and that Infosys 2014 customer budgets to be flat Y/Y.
    • Overall pricing is said to be "stable," though price pressure exists for major outsourcing deals and "commoditized services." Clients in the key financial services vertical are said to be focused on cost optimization, something the outsourcing giant expects to benefit from.
    • Infosys now has 495 $1M+ clients, up from 469 at the end of FQ2. Its top 10 clients account for 23.5% of revenue.
    • FQ3 opex growth was 7.3% Y/Y, slightly less than revenue growth of 9.9%. Gross margin was 36.1%, -90 bps Y/Y.
    • Shares also rallied following Infosys' October FQ2 beat.
    | Comment!
  • Oct. 11, 2013, 1:37 PM
    • Infosys' (INFY +6.1%) FQ2 beat and in-line FY14 revenue guidance (9%-10% growth vs. 9.3% consensus) is providing a lift to IT outsourcing peers Cognizant (CTSH +5.4%), Wipro (WIT +4.2%), and Accenture (ACN +1.7%)
    • Cognizant and Wipro have made new 52-week highs. In July, both companies rallied in response to Infosys' FQ1 beat. All four companies sold off last month after Cognizant provided soft revenue and bookings guidance (more the result of consulting weakness rather than outsourcing)
    • Infosys' CC remarks could also be helping out the group. CEO S.D. Shibulal mentioned demand from financial services clients is picking up, retail/consumer products demand remains healthy, and European firms are showing greater interest in outsourcing across verticals. However, manufacturing spend is "relatively stagnant," and and the energy, utilities, and telecom verticals remain challenging.
    • 15 cloud/big data-related deals were signed in FQ2. Cloud services represent both a growth opportunity for outsourcing firms, and (to the extent in-house projects are abandoned for public cloud services) a long-term threat.
    • The rupee's decline boosted Infosys' EBIT margin by 250 bps, but wage hikes took a 300 bps toll.
    | Comment!
  • Sep. 27, 2013, 1:07 PM
    • The soft revenue and bookings guidance provided with Accenture's (ACN -3.8%) FQ4 results are oveshadowing the company's dividend hike and $5B buyback expansion. Consulting/outsourcing rival IBM (IBM -1.7%) is trading lower in sympathy. Wipro (WIT -3.2%) is also selling off, but outsourcing peers Infosys (INFY -0.3%) and Cognizant (CTSH -0.6%) have pared their morning losses.
    • Accenture's CC remarks (transcript) likely aren't helping. CFO David Rowland mentioned that while outsourcing bookings were healthy (book-to-bill of 1.4), all 3 consulting bookings segments - management consulting, tech consulting, and systems integration - were at the low end of its B2B guidance ranges. Total consulting B2B was 1.0
    • Rowland adds Accenture thinks the "cycle of lower growth" it has seen in recent quarters "won't change much" near-term.
    • Echoing comments from Cisco's John Chambers, CEO Pierre Nanterme mentioned Accenture is seeing more emerging markets "volatility," even as the U.S. performs well and Europe stabilizes.
    • Janney's Joseph Foresi is staying bullish, arguing Accenture is "well positioned given its high end capabilities to gain market share as outsourcing becomes more commoditized."
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  • Sep. 11, 2013, 4:02 PM
    • A number of tech names were volatile today in the wake of presentations from company execs at Deutsche's annual dbAccess Technology Conference (runs from Sep. 10-12).
    • In addition to Trulia (previous), companies rallying following presentations include Aruba (ARUN +3.5%), Wipro (WIT +3.5%), QLogic (QLGC +3.1%), Informatica (INFA +1.4%), and SGI (SGI +1.1%). QLogic might also be getting a lift from a bullish Barclays coverage launch.
    • Companies declining following executive presentations include Dangdang (DANG -4.9%), Medidata (MDSO -1.9%), Ruckus (RKUS -1.8%), and Demand Media (DMD -1.8%).
    • Full conference schedule
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  • Aug. 29, 2013, 9:45 AM
    • Infosys (INFY +0.1%) has been upgraded to Outperform, and Wipro (WIT +0.3%) to Neutral, by Macquarie.
    • AutoNavi (AMAP -1%) has received a two-notch downgrade to Underperform from Macquarie, and a downgrade to Hold from Deutsche, following its Q2 miss and decision to stop providing guidance.
    • Vodafone (VOD +8.3%) has been started at Sell by SocGen. Investors are more interested in other news.
    • SMI (SMI +2.8%) has been upgraded to Market Perform by Bernstein.
    • LTX-Credence (LTXC -1.4%) has been cut to Hold by Craig-Hallum a day after providing soft guidance to go with its FQ4 results.
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  • Jul. 30, 2013, 1:24 PM
    • The Sensex declined 1.25% overnight after the Reserve Bank of India kept its benchmark rate steady at 7.25% but said it would "forfeit some monetary policy discretion to address external sector concerns." Translation: Slowing inflation and growth might normally lead to easier policy, but the bank is instead focused on supporting the rupee.
    • Marketfields' Michael Shaoul notes an Indian small cap index off 27% YTD to a 4-year low is a pretty good gauge of the stress in the domestic economy. An Indian small cap ETF: SCIF -5.3% today.
    • Individual stocks: ICICI Bank (IBN -3.3%), Tat Motors (TTM -4.7%), Dr. Reddy's Labs (RDY -4.4%).
    • Not bullish on Indian consumer names, Credit Suisse does take a liking to one with U.S. exposure: Wipro (WIT +1.1%).
    • Other ETFs of note: EPI -3.9%, INDY -3.2%, PIN, INP, INDA, INXX, SCIN, INDL.
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  • Jul. 12, 2013, 9:38 AM
    Wipro (WIT +1.9%) and Cognizant (CTSH +1.7%) trade higher after Infosys (INFY +8.1%) beats FQ1 estimates and reaffirms FY14 revenue guidance amidst fears of a cut. A plunging rupee helped lower the outsourcing giant's prices, and CEO S.D. Shibulal claims a U.S. immigration bill that proposes to curtail the ability of visa holders at companies with large numbers of them to visit domestic client locations "has not had any impact on the deal pipeline." Gross margin was 35%, -10 bps Q/Q and -460 bps Y/Y, thanks in large part to a 24% Y/Y increase in staff costs. Consulting/software implementation, boosted by Lodestone, was a strong point. The results stand in contrast to Accenture's (ACN +0.5%)  recent revenue miss and guidance cut.
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Company Description
Wipro Ltd is an IT services company. Its IT Services businesses provide IT & IT-enabled services which include IT consulting, custom application design, development, re-engineering & maintenance, systems integration, package implementation, & others.