Wipro Limited Q1 FY22 – Earning Analysis – Globe Capital
17-Nov-2021
Wipro Limited Q1 FY22 – Earning Analysis

At the CMP of Rs. 575, the stock is trading at full year ttm P/E multiple of 27.1 times with the ttm EPS of Rs 21.21 per share.

Q1 FY22 Overview and Verdict
CMP
Rs. 575
Verdict
Beats own Guidance

At the CMP of Rs. 575, the stock is trading at full year ttm P/E multiple of 27.1 times with the ttm EPS of Rs 21.21 per share.

The Company beats its own revenue growth guidance for the first quarter, aided by investments towards digital services as businesses continued to move online during the pandemic.

Revenue increased 12.4% sequentially to Rs 18,252.4 crore in the quarter ended June.

Net profit rose 8.7% to Rs 3,232.10 crore.

Operating profit rose 1.6% to Rs 3472 crore.

Margin contracted 170 basis points to 18.8%.

Earnings per share for the quarter was at Rs. 5.92.

Operating Cash Flow was at Rs. 33.5 billion which is 103.7% of Net Income.

Its IT Services workforce crossed the milestone of 200K, closing headcount at 209,890.

Future Guidance:

The management expects Revenue from its IT Services business to be in the range of $2,535million to $2,583million. This translates to a sequential growth of 5% to 7%.

The Company signed an agreement to acquire Ampion on April 1, 2021, and previously announced that it will be closed during Q1’22. However certain regulatory approvals are still pending and the transaction is now expected to be closed in Q2’22.

Management Takeaways:

The Company expected full-year revenue to grow at well over double digits even excluding for Capco contribution.

Despite the severe onslaught of the pandemic, it delivered its best-ever quarter, with secular growth across all SMUs, Sectors and GBLs. Our sequential revenue growth of 12.2% was well ahead of the top-end of guidance range, both organically and with Capco. Though in the early days yet, the Company pleased with the way it has collaborated with Capco to build its joint go-to-market offerings and strategy. It remains focused on deepening our customer relationships, investing in talent & capabilities for the future, and winning market share.

The Company delivered a robust growth in EPS of 41% YoY even as it continued to invest for growth. At 103.7% of its net income, its operating cash flows for the quarter remained healthy. The management is also pleased to share that it has successfully issued its debut bond offering in the international markets for $750 million.

Disclosure

Globe Capital Market Limited (“GCML”) is a Stock Broker registered with BSE, NSE and MSEI in all the major segments viz. Capital, F & O and CDS segments. GCML is also a Depository Participant and registered with both the Depositories viz. CDSL and NSDL. Further, GCML is a SEBI registered Portfolio Manager. GCML includes subsidiaries, group and associate companies, promoters, directors, employees and affiliates.

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