Wipro
Wipro's Q2 revenues are expected to grow by about 5.5 per cent q-o-q, while margins are expected to remain flat or negative due to wage hikes. The company has given dollar revenue guidance for IT services (74 per cent of revenues) of $1.09 billion (Rs 5,014 crore).
Unlike in the June quarter, when its consolidated topline grew 5 per cent to Rs 5,692 crore (Rs 56.92 billion) aided by rupee's depreciation and a strong showing in the IT services space, the company is expected to post an Rs 90 crore (Rs 900 million) forex loss due to a high proportion of hedges in September quarter.
Wipro's sequential growth in the June quarter ironically came from the financials and retail verticals, which grew 5.5 per cent and 7.8 per cent, respectively.
The company has hedges of $2.6 billion to cover cash inflows over the next year with a third of it hedged for the current fiscal. Sluggish client addition (31 in Q1 FY09) and dip in revenue from new clients are a cause for concern. The positives: unlike the cross currency issues that plague Infosys, Wipro's dollar revenues will be less affected due to lower non-dollar billings.
The company has made 14,000 offers for FY09 with 800 joining in the first quarter while the rest are expected to join in the quarters ahead. The company, with an employee utilisation at 75 per cent, uses its workforce more efficiently than its peers. At Rs 343, the stock is trading at 13.4 times its FY09 estimated earnings of Rs 25.80.
Image: Wipro chairman Azim Premji. | Photograph: Dibyangshu Sarkar/AFP/Getty Images
Also read: The classy new Hyderabad international airport
Advertisement
