X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Wipro: Unaffected growth - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Apr 20, 2001

    Wipro: Unaffected growth

    In the 4QFY01 the contribution of the R&D group to Global IT services division has gone up to 54% compared to 50% in 3QFY01. The contribution of the enterprise solutions division dropped to 41% from 45% in 3QFY01 and the share of support services held steady at 5%. The enterprise solutions division seems to have taken a hit.

    Global IT services division (Rs m) 3QFY01 4QFY01 Change
    R&D group 2,400 2,792 16.3%
    Enterprise solutions group 2,160 2,120 -1.8%
    support services 240 259 7.7%
    Total 4,800 5,171 7.7%

    The share of e-commerce to Global IT service division was up from 16% in 3QFY01 to 18% 4QFY01. But the company has taken a hit because the revenues from application development and maintenance in client server & mainframes (legacy systems) have reduced by 28% sequentially. This is due to a conscious effort by the company to move out of the area. During the quarter most of the software companies have in fact increased or have been forced to increase revenues from legacy systems due to the lack of business from other areas. This might be due to Wipro’s efforts to realize its objective of becoming one of the top 10 technology companies of the world. The company added another service, Data warehousing to its portfolio that has tremendous growth potential. As corporates all around the world have been collecting operational data through various software systems and therefore, would be looking to use this data for decision support. According to survery.com the market for business intelligence and data warehousing is expected to be US$ 148 bn in 2003 growing at a CAGR of 45%.

    Enterprise solutions group (Rs m) 3QFY01 4QFY01 Change
    E-commerce 768 931 21.2%
    ERP 96 155 61.6%
    Datawarehousing N. A. 103 -
    Application development and Maintenance 1296 931 -28.2%
    Total 2160 2120 -1.8%

    However, the growth driver has been the embedded systems and the Internet access practice that contributed to 20% of the revenues of the Global IT group. The group continues to operate at margins as high as 35%.

    R&D group (Rs m) 3QFY01 4QFY01 Change
    Telecom and Internet working 1,440.0 1,603.01 11.3%
    Embedded systems and Internet access 816.00 1,034.20 26.7%
    Telecom and internet service provider practice 144.00 155.13 7.7%
    Total 2,400.0 2,792 16.3%

    The company added 32 new clients in the quarter that contributed to around 15% of the revenues for the quarter. The contribution of offshore development to the revenues was 50% for 4QFY01 compared to 48% in 3QFY01.

    Wipro expects to grow ahead of industry growth rate pegged at 40% to 45% by NASSCOM. In the previous year the company has shown a 22% increase in onsite billing rate and 18% increase in offshore billing rates. If the company does not see the billing rates improving by the same amount in FY02 (which is very likely considering the drop in demand) it can offset this by controlling its employee costs. The company has already slashed down on its recruitment. The number of employee recruited in 4QFY01 was 444 compared to 912 in the 3QFY01.

    The company’s growth for the quarter was on the back of 56% jump in revenues in the Indian IT services and products division that accounts for 27% of its revenues (the share of Global IT division is 55% and consumer care and lighting division is 6%). The domestic sector is not the focus for Wipro and also the demand in the sector is not so strong so that this can continue. Also, the operating margins for the Indian IT services division at 13.7% is way below the Global IT division of 35%. It is very likely that Wipro in the next quarter might not show similar kind of topline growth, as the global scenario is not improving. Considering this the next quarter’s performance will be a far subdued one.

     

     

    Equitymaster requests your view! Post a comment on "Wipro: Unaffected growth". Click here!

      
     

    More Views on News

    Wipro: A Decent Start to the Year (Quarterly Results Update - Detailed)

    Jul 27, 2017

    Digital services drive growth for Wipro in 1QFY18.

    Wipro: A Good Performance (Quarterly Results Update - Detailed)

    May 4, 2017

    Acquisitions and digital services aid growth.

    Wipro: Another Flat Quarter (Quarterly Results Update - Detailed)

    Feb 9, 2017

    Wipro has reported a 1% QoQ decrease in the consolidated topline and a 1.9% QoQ increase in the consolidated bottomline for the quarter ended December 2016.

    Tech Mahindra: Our Revised View (Quarterly Results Update - Detailed)

    Aug 2, 2017

    A better than expected turnaround in performance results in a change in view.

    Infosys: A Decent Start to FY18 (Quarterly Results Update - Detailed)

    Jul 14, 2017

    Infosys starts FY18 on an encouraging note with a stable performance.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    WIPRO SHARE PRICE


    Aug 18, 2017 (Close)

    TRACK WIPRO

    WIPRO - ALLIED DIGITAL COMPARISON

    Compare Company With Charts

    COMPARE WIPRO WITH

    MARKET STATS