Approved by AICTE

,
New Delhi 110070 Website: www.srisiim.org

EBIT & EPS of WIPRO LIMITED

Project Report
On

Financial Management

Submitted to:-

Submitted By:-

PROF. MUKESH BHATIA

Declaration

We hereby declare that the following project report of

Financial Management titled EBIT & EPS of WIPRO
LIMITED is an authentic work done by us. This is to declare
that all work indulged in the completion of this work such as
research, analysis of activities of an organization is a profound
and honest work of ours.

PLACE: NEW DELHI

Upendra kumar
Parshant Kumar

Rohit Kumar

(PGDM 2013-2015)

ACKNOWLEDGEMENT

We would like to express my hearty gratitude to my faculty

guide, PROF. MUKESH BHATIA for giving us the
opportunity to prepare a project report on Financial
Management and for his valuable guidance which helped us in
completing this project.

Parshant Kumar
ROHIT KUMAR
Upendra Kumar

PGDM Batch (2013-2015)

SRI SIIM

About Wipro

"Applying Thought"

Type

Public

Traded as

BSE: 507685
NSE: WIPRO
NYSE: WIT
BSE SENSEX Constituent
CNX Nifty Constituent

Industry

IT services, IT consulting

Founded

Mumbai, Maharashtra (in 1945)

Founder(s)

M.H. Premji

Headquarters

India

Area served

Worldwide

Key people

Azim Premji (Chairman)

[1]

T K Kurien (CEO)

Services

IT, business consulting and outsourcingservices

Revenue

437.6 billion (US$7.3 billion) (2013-14)

[2]

Operating income

89.3 billion (US$1.49 billion) (2013-14)

[2]

Profit

78.4 billion (US$1.3 billion) (2013-14)

Total assets

502.3 billion (US$8.37 billion) (Mar 2014)

[2]

Total equity

344.9 billion (US$5.75 billion) (Mar 2014)

[2]

Employees

146,053 (March 2014)

Website

www.wipro.com

[2]

[3]

Wipro Infotech is a leading manufacturer of computer hardware and provider of

IT services in India and the Middle East region. Part of Wipro Ltd, the $6.98
billion conglomerate and global leader in technology enabled solutions, the
company leverages on the parent's philosophy of 'Applying Thought' to enable
business results by being a transformation catalyst.
Backed by our strong quality processes and rich experience managing global
clients across various business verticals, we align IT strategies to your business
goals. From simple changes in process to innovative solutions, we help our
customers harness the power of IT to achieve profitable growth, market
leadership, customer delight and sustainability. Along with our best of breed
technology partners, Wipro Infotech also helps you with your hardware and IT
infrastructure needs.
Our vast IT services portfolio includes consulting, systems integration,
application development and maintenance, technology infrastructure services,
package implementation and R&D services among others.
Wipro Infotech maintains offices across India, and has operations in Middle
East. We also have a joint venture with DAR Al Riyadh Group in Saudi Arabia.

History
Early formative years
The company was incorporated on 29 December 1945, in Mumbai by
Mohamed Premji as 'Western India Products Limited', later abbreviated to
'Wipro'. It was initially set up as a manufacturer of vegetable and refined
oils in Amalner, district Jalgaon, Maharashtra, under the trade names of
Kisan, Sunflower and Camel.The company logo still contains a sunflower to
reflect products of the original business.
In 1966, after Mohamed Premjis death, his son Azim Premji returned home
from Stanford University and took over Wipro as its chairman at the age of
21.
During the 1970s and 1980s, the company shifted its focus to new
business opportunities in the IT and computing industry, which was at a
nascent stage in India at the time. On 7 June 1977, the name of the
company changed from Western India Vegetable Products Limited, to
Wipro Products Limited.
The year 1980 marked the arrival of Wipro in the IT domain. In 1982, the
name was changed from Wipro Products Limited to Wipro
Limited. Meanwhile Wipro continued to expand in the consumer products
domain with the launch of "Ralak" a tulsi-based family soap and "Wipro
Jasmine", a toilet soap

Earnings Before Interest & Tax - EBIT

An indicator of a company's profitability, calculated as revenue minus
expenses, excluding tax and interest. EBIT is also referred to as "operating
earnings", "operating profit" and "operating income", as you can re-arrange the
formula to be calculated as follows:

EBIT Revenue - COGS- Operating

=
Expenses
Also known as Profit Before Interest & Taxes (PBIT), EBIT equals Net Income
with interest and taxes added back to it.
In other words, EBIT is all profits before taking into account interest payments
and income taxes. An important factor contributing to the widespread use of
EBIT is the way in which it nulls the effects of the different capital structures
and tax rates used by different companies. By excluding both taxes and interest
expenses, the figure hones in on the company's ability to profit and thus makes
for easier cross-company comparisons.
EBIT was the precursor to the EBITDA calculation, which includes depreciation
and amortization expenses.

Earnings Per Share - EPS

The portion of a company's profit allocated to each outstanding share of
common stock. Earnings per share serves as an indicator of a company's
profitability.
When calculating, it is more accurate to use a weighted average number of
shares outstanding over the reporting term, because the number of shares
outstanding can change over time. However, data sources sometimes simplify
the calculation by using the number of shares outstanding at the end of the
period.
Diluted EPS expands on basic EPS by including the shares of convertibles or
warrants outstanding in the outstanding shares number.

EBIT & EPS of Wipro Limited

Margin beat drives EPS upgrades
Wipros 3QFY14 results were below our expectation on the topline. However,
EBIDTA margin beat helped deliver PAT which was 3% above our estimates.
Though too early to take a call, we see some uptick owing to the recent
reshuffling of business heads done in Oct -13. Global infrastructure services (up
5.6% QoQ), BFSI (up 3.1% QoQ in cc, despite seasonality) delivered uptick in
momentum in 3QFY14 which raises optimism. We note that both these units had
new business heads effective Oct-13. Company guided for improved deal
pipeline and increased confidence on growth trajectory.
We see Wipro narrowing its growth differential vs peerset in FY13. We expect
6.7/13.5% US$ revenue growth for FY14/FY13E. Strong margin performance for
the second consecutive quarter also boosts our confidence. Wipros 3Q EBIT
margin for IT services business is 680/200bps lower than TCS/Infosys margins.
With improving growth/margin trajectory, we see scope for P/E rerating. Retain
BUY with a revised TP of Rs 640 (16x FY14E).
3QFY14 Highlights: Total revenues at US$ 1,678mn (up 2.9% QoQ) were
marginally below our estimates (US$ 1684mn).Constant currency growth for
the quarter stood at 2.3% QoQ. Wipros USD revenue performance is
respectable when compared with peers (TCS/Infosys/HCL Tech delivered
3/1.7/4% QoQ USD revenue growth).Wipro guided for 4QFY14 revenues of
US$ 1712-1745mn,which implies a growth of 2-4% QoQ (Including Opus CMC
acquisition).Excluding the impact of acquisition, the 4Q revenue guidance
implies a growth of 1.4-3.4% QoQ. Consolidated EBIDTA margin at 23% was up
180bps QoQ, above our estimates (21.9%). IT services EBIT margin came at
23%, was up 50bps QoQ. PAT at Rs 20.1bn was 3% ahead of our estimates.
Valuations and view: Wipro is currently trading at 14x FY14E EPS, which
implies a 18/12% discount to TCS/Infosys. We believe that risk return profile
remain favorable for Wipro. Company has further levers for improving margins
which include scope for improvement in utilization rates in IT services. Our EPS
estimates are upped by 2.4/4% for FY14/FY13E. Our TP is upgraded by 16% to
Rs 640 (16x FY16E) aided by rollover to FY14E. Maintain BUY.

FINANCIAL SUMMARY (CONSOLIDATED)

(Rs mn)
Net Sales
EBITDA
PAT
Diluted EPS (Rs)
P/E (x)
EV / EBITDA (x)
RoE (%)

3QFY14 2QFY14
112,713 107,727
25,923 22,845
20,147 19,321

QoQ
(%) 3QFY13 YoY(%)
FY11
FY12E FY13E FY14E
4.6%
NA
NA 374,256 434,232 500,927 552,640
13.5%
NA
NA 76,743 95,946 112,973 124,432
4.3%
NA
NA 61,362 76,543 88,307 98,651
25.0
31.1
35.9
40.1
22.2
17.8
15.5
13.9
16.6
12.7
10.2
8.7
23.3%
25.7% 23.9% 22.6%

WOPRO: RESULT REVIEW 3QFY14

Result and Concall highlights

Verticals and Service line traction : Healthcare & Life sciences(up 7.6% QoQ in
constant currency), financial services (up 3.1% QoQ) and Energy& Utilities (up
4.8% QoQ in cc) drove growth on vertical front. USA (up 3.2% QoQ), Europe
(up 3% QoQ in cc), India and Middle East (up 5.5% QoQ in cc) drove growth on
geographic front. Global infrastructure services (up 5.6% QoQ), BPO (up 4.1%
QoQ) delivered growth on service line front.

Company has been showing consistent traction in top 10 accounts over the
past nine quarters. Revenues from top 10 clients (up 3.8% QoQ) accounted for
~23% of total revenues. Company indicated at identifying the next set of 125
strategic accounts to drive growth. Wipro cited that CY14 IT budgets would be
flat with an upward bias.

IT services business EBIT margin came at 23%, up 50bps on a sequential basis.

Increased automation
and efficiencies in the delivery model aided in margin expansion for the
quarter.
Management guided that Infrastructure Management Services (~24.9% of
revenues) is offering strong growth potential.

Headcount drops : Exit headcount came at 146,402, which represents a net

decline of 814 employees. This represents the second sequential quarter for

decline in headcount. Company indicating of increasing focus on automation

and efficiencies in delivery model which is aiding productivity.

Utilisation (ex-trainees) at 74.3% was flat QoQ. We see scope for improvement
in utilisation rates in FY15E which could act as a margin lever. Forex hedges as
at the end of the quarter stood at US $1.5bn.
IT services revenues at US$ 1,678mn, up 2.9% QoQ, were marginally below
our expectation (US$ 1,684mn)
IT services EBIT margins at 23% improved by 50bps on a sequential basis, ahead
of estimates (22.1%). Company guided that automation and improving
efficiencies in delivery model aiding margin improvement
QUARTERLY FINANCIALS SNAPSHOT
(Rs mn)
US$ Revenues(US$ mn)
Net sales and services
Cost of sales and services
Selling and marketing expenses
General and administrative expenses
EBIDTA
Other income
Interest
Foreign exchange gain/(loss)
Depreciation
Profit Before Taxation
Provision for taxation including fringe benefit tax
Minority interest
Profit to Equity holders of the company
MARGIN ANALYSIS
Margin Analysis
3QFY14
Cost of Sales
65.2%
S&M/Sales
6.8%
G&A/Sales
5.1%
EBIDTA Margin
23.0%
Tax rates
23.0%
NPM
17.9%
Source: Company, HDFC sec Inst Research
EBIT Margins (%)
IT Services
IT Products

3QFY14
1,678
112,713
73,466
7,619
5,705
25,923
3,812
898
604
3,109
26,332
6060
125
20,147

2QFY14
66.6%
6.9%
5.2%
21.2%
22.9%
17.9%

2QFY14
1,631
107,727
71,758
7,473
5,651
22,845
3,412
656
2,193
2,616
25,178
5754
103
19,321

QoQ (bps)
(143.1)
(17.7)
(18.4)
179.3
16.1
(6.1)

3QFY14
23.0%
(1.1)%

3QFY13
67.2%
8.3%
5.7%
18.8%
20.2%
15.3%

2QFY14
22.5%
1.6%

QoQ
2.9%
4.6%

13.5%

4.3%

YoY(bps)
(204)
(155)
(59)
418
283
262
QoQ (bps)
50
(270)

Europe (up 3% QoQ in cc and

5.4% in US$), India and Middle East (up 5.5% qoq in cc) drove
growth on geographic front. North
America (up 3.1% QoQ) also remained strong.
Strong traction in developed markets (US, Europe) in the quarter is a key
positive
Healthcare & Life sciences and
Energy& Utilities drove growth on vertical front
GEOGRAPHIC MIX
Geography Q1FY1
Q3FY1 Q4FY1 Q1FY1
3QFY1
(%)
2 Q2FY12
2
2
3 Q2FY13 3QFY13 4QFY13 1QFY14 2QFY14
4
Americas

53.0

51.7

52.5

52.1 51.6

51.5

49.9

50.1

49.7

49.8

49.9

Europe
India &
Middle

28.6

28.8

28.2

27.7 28.1

28.2

29.6

28.5

29.0

28.9

29.6

9.0

9.3

9.1

8.8

8.6

8.8

9.4

8.8

8.3

8.5

9.4

10.2

10.2

10.6 11.5

11.5

11.7

12.0

12.5

13.0

12.0

East
APAC and
other
Emerging
Markets

9.6

REVENUES BY GEOGRAPHY
3QFY14

2QFY14

QoQ growth
(%)

3QFY13

Americas

838

812

3.1

787

Europe

497

471

5.4

467

India & Middle East

143

135

5.4

139

APAC and other Emerging

markets

201

212

(5.0)

187

Geographic Growth (US$ mn)

YoY
growth (%)
6
.
4
6
.
4
2
.
8
7
.
8

VERTICAL MIX OF REVENUES

Verticals (%)
Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 2QFY1 3QFY1

Global Media and Telecom

Finance solutions
Manufacturing and Hi-tech
Healthcare and Life Sciences
and
Services
Retail and Transportation
Energy & Utilities
Total

16.8 15.7
26.7 27.1
19.7 19.0

15.4
27.3
19.0

14.9 14.9
26.6 26.4
19.1 19.4

10.2

10.0

10.0 10.1

9.8

Q4FY13 1QFY14
14.4 14.3 13.8 13.6
27.0 26.9 26.3 26.5
19.0 18.7 19.3 19.1

9.5

9.9 10.1

9.8

4
13.9
26.4
19.0

4
13.7
26.4
18.6

10.1

10.6

15.0 14.7 14.9 15.4 15 15.0 15.1 15.1 15.1 14.8 14.6
11.6 13.7 13.4 14.0 14.2 15.1 15.1 15.4 15.9 15.8 16.1
100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

VERTICAL-WISE REVENUES
Vertical (US$ mn)
Global Media and Telecom
Finance Solutions
Manufacturing and Hi-tech
Healthcare and Life Sciences and
Services
Retail and Transportation
Energy and Utilities

3QFY14
229.9
443.1
312.2

2QFY14
226.7
430.6
309.9

QoQ growth
(%)
1.4
2.9
0.7

3QFY13
225.5
424.2
294.9

YoY growth
(%)
2.0
4.5
5.9

177.9
245.0
270.2

164.7
241.4
257.7

8.0
1.5
4.9

156.1
238.1
238.1

14.0
2.9
13.5

Infrastructure managed services and BPO delivered growth on service front

Revenues from top five clients inched up 5.2% QoQ. Revenues from top 10
clients were up by 3.8% QoQ
SERVICE MIX OF REVENUES
Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 2QFY1 3QFY1
Q3FY13 Q4FY13 1QFY14
4
4

Service Lines (%)

Technology
Infrastructure

21.6 21.7 22.1 21.7 22.6 22.8 23.2 23.7

24.5 24.2

24.2

24.9

7.5

7.4

7.2

29.7 30.4 30.5 30.8 30.6 30.7 30.7 31.4

9.8 9.3 8.8 8.5 8.2 8.4 8.7 8.8

31.4 31.3
8.8 8.8

31.9
8.6

31.7
8.7

8.2 8.3 8.4 8.4 8.2 8.5 8.2 7.5

24.7 23.9 23.6 24.0 23.6 22.5 22.1 21.5

7.5 7.5
20.7 20.7

7.6
20.3

7.6
19.9

Services
Analytics and
Information
6.0
Management
Business Application
Services
BPO
Product Engineering &
Mobility
ADM

6.4

6.6

6.6

6.8

7.1

7.1

7.1

7.1

CLIENT METRICS
Client Details
Top customer
Top five customers
Top 10 customers
> 100 mn
>75 mn
> 50 mn
>20 mn
> 10 mn
> 5 mn
> 3 mn
> 1 mn
Total Number of
Customers
Number of new
customers

Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 1QFY1

Q3FY13 Q4FY13
4 2QFY14 3QFY14
3.1% 3.3% 3.7% 3.9% 3.5% 3.5% 3.5% 3.2% 3.6% 3.7% 3.8% 3.7%
11.4
% 10.9% 11.6% 11.8% 11.5% 12.2% 13.0% 13.2% 13.1% 13.7% 13.9% 14.2%
19.7
% 19.4% 20.0% 19.9% 20.0% 20.9% 22.3% 22.4% 21.9% 22.5% 22.8% 23.0%
3
12
22
68
117
180
255
429

4
12
24
69
118
195
258
438

5
13
24
70
120
192
267
462

6
14
25
73
121
197
284
462

7
16
25
75
121
208
292
475

8
14
25
73
131
213
302
478

9
16
25
71
133
218
293
475

10
16
26
73
132
214
293
484

10
16
26
76
133
213
291
490

10
15
27
76
133
218
281
492

10
15
27
78
137
220
282
487

11
15
28
80
136
218
280
495

904

937

930

953

943

919

939

966

978

946

942

966

68

49

44

39

41

37

53

50

52

28

45

42

Headcount declined for the second quarter in a row. Company indicated of

focus on improving automation and efficiencies in the delivery model
We see scope for further improvement in utilisation rates, which could act as a
margin lever in FY15
HEADCOUNT
Q2FY1 Q3FY1
Q1FY1 Q2FY1 Q3FY1 Q4FY1 1QFY1
Q1FY12
2
2 Q4FY12
3
3
3
3
4 2QFY14 3QFY14
126,49 131,73 136,73
138,55 140,56 142,90 145,81 147,28 147,21
0
0
4 135,920
2
9
5
2
1
6 146,402

Total
Net additions
Global IT services excl
IFOX-

4,105

5,240 5,004

(814) 2,632 2,017 2,336

2,907

1,469

(65)

(814)

69.7% 69.3% 67.1%

67.4% 68.3% 66.8% 64.8% 64.9% 64.7% 66.1%

66.0%

76.9% 76.1% 73.5%

74.1% 75.5% 73.7% 71.7% 71.7% 71.4% 73.0%

72.9%

81.0% 80.7% 77.5%

76.1% 77.9% 77.9% 74.8% 74.6% 73.3% 74.3%

74.3%

22.6% 21.1% 19.0%

17.5% 15.6% 14.6% 14.2% 13.7% 13.2% 13.5%

14.3%

23.2% 18.5% 14.2%

14.4% 15.2% 14.4% 12.9% 12.5% 13.0% 15.4%

16.3%

Gross
Global IT service execl
IFOXNet
Global IT services execl
IFOXNet excluding trainees
Attritions
Voluntary TTM
Voluntary Quarterly
Annualized
Involuntary attrition
2.0%

1.3%

1.6%

2.5% 3.2%

3.5%

4.0%

3.7%

4.9%

5.6%

4.2%

Annualized

PEER VALUATIONS
CMP

Mcap

(Rs)

(Rs bn)

Infosys

3,727

2,130

164.9 182.3 214.4 234.5 22.6

20.4

17.4

15.9

16.5

13.7

11.3

TCS

2,220

4,345

71.1

96.4 114.9 130.8 31.2

23.0

19.3

17.0

23.6

16.6

13.6

557

1,367

25.0

31.2

36.0

22.2

17.8

15.5

13.9

15.3

12.3

10.2

HCL Tech

1,381

968

58.1

85.2

97.1 107.9 23.8

16.2

14.2

12.8

15.9

10.5

9.0

Tech M

1,771

410

82.6 117.3 129.3 146.3 21.4

15.1

13.7

12.1

13.2

9.6

8.7

Wipro

EPS

P/E

EV/EBIDTA

FY11 FY12E FY13E FY14E FY11 FY12E FY13E FY14E FY12 FY13E FY14E FY14E FY13

40.1

ROE (%)
FY12 FY13 FY14
E
E
E

24.3
25.7% %

24.7
%

23.4
%

42.2
11.7 40.8% %
25.7
8.7 23.3% %
36.3
7.6 32.7% %
34.4
7.5 33.5% %

38.9
%
23.9
%
31.9
%
28.7
%

35.0
%
22.6
%
28.2
%
25.7
%

9.2

Assumption
IT services revenues(US$ mn)
Growth(%)
Average Exchange rate
Cost of Sales
S&M of Sales
G&A as a % of Sales
Consolidated EBIDTA margin(%)

ASSUMPTIONS
FY10
5,921
13.4%
47.96
67.8%
5.6%
5.8%
20.8%

FY11
6,218
5.0%
54.43
67.1%
6.5%
5.9%
20.5%

FY12E
6,632
6.7%
60.13
65.8%
6.9%
5.2%
22.1%

FY13E
7,531
13.5%
61.00
65.8%
6.7%
4.9%
22.6%

FY14E
8,495
12.8%
60.00
66.0%
6.6%
4.9%
22.5%

CHANGE IN ESTIMATES
FY13E

Revenues
EBIDTA
PAT
EPS

New
434,232
95,946
76,543
31.1

Old
433,762
93,090
74,861
30.4

FY14E
%
Change
0.1%
3.1%
2.2%
2.3%

New
500,927
112,973
88,307
35.9

Old % Change
495,783
1.0%
108,029
4.6%
84,864
4.1%
34.5
4.0%

INCOME STATEMENT
(Rs mn)
Net Sales
Growth (%)
Cost of Software
development
Selling and marketing
expenses
General and Admin
expenses
EBIDTA Profits
EBIDTA Profit Margin (%)
Depreciation
EBIT
Other Income
Interest
Forex
PBT
Tax
PAT
Minority Interest
APAT

FY10
FY11 FY12E FY13E FY14E
318,747 374,256 434,232 500,927 552,640
17.4% 16.0% 15.4% 10.3%
216,040 251,268 285,664 329,742 364,654
17,953 24,213
18,416
66,338
20.8%
9,754
56,584
8,982
3,371
3,328
65,523
12,955
52,568
243

EPS Growth (%)

22,032 22,748 24,666 27,079

76,743 95,946 112,973 124,432
20.5% 22.1% 22.6% 22.5%
9,397 11,255 12,768 13,534
67,346 84,692 100,205 110,898
11,317 13,885 15,100 17,400
2,693
2,449 1,200
800
2,626
2,949
262
216
78,596 99,077 114,367 127,714
16,912 22,140 25,733 28,736
61,684 76,937 88,635 98,979
322
394
328
328

52,325 61,362 76,543

APAT Growth (%)

EPS

29,874 33,546 36,474

21.29

88,307 98,651

17.3%

24.7%

15.4%

11.7%

25.0

31.1

35.9

40.1

17.2%

24.7%

15.4%

11.7%

BALANCE SHEET

50,525
1,714
54,756

FY12E
4,926
335,251
340,177
1,171
854
62,962
63,816
846
9
14,578
420,597
51,270
1,714
54,756

FY13E
4,926
397,641
402,567
1,171
854
62,962
63,816
846
9
16,374
484,783
50,502
1,714
54,756

3,232

Investments

41,961

69,171

69,171

69,171

69,171

Inventories

10,662

3,263

3,596

4,117

4,542

Unbilled Revenues

30,025

31,988

31,938

35,065

38,685

Trade Receivables

80,328

76,635

77,913

82,344

90,845

77,666
20,852
37,524
257,057
47,258
32,858
1,121
81,237
175,820
2,597
354,764

84,838
20,798
41,807
259,329
48,067
32,537
1,174
81,778
177,551
4,235
357,952

144,949
21,177
45,933
325,505
50,583
32,547
2,924
86,054
239,451
4,235
420,597

210,086
21,377
50,120
403,109
59,288
36,292
3,124
98,704
304,405
4,235
484,783

277,044
21,577
54,142
486,834
66,922
39,438
3,324
109,685
377,149
4,235
555,994

Share Capital
Reserves
Total Shareholders Funds
Minority Interest
Long Term Debt
Short Term Debt
Total Debt
Deferred Taxes
Long Term Provisions
Others
TOTAL SOURCES OF FUNDS
APPLICATION OF FUNDS
Net Block
Intangible assets
Goodwill
Investment in equity accounted

FY10
4,917
280,397
285,314
849
22,510
36,448
58,958
353
61
9,229
354,764

FY11
4,926
278,886
283,812
1,171
854
62,962
63,816
846
9
8,298
357,952

58,988
4,229
67,937

FY14E
4,926
467,350
472,276
1,171
854
62,962
63,816
846
9
17,876
555,994
48,968
1,714
54,756

Investee

Cash & Equivalents

ST Loans & Advances
Other Current Assets
Current Assets
Trade Payables
Other Current Liabilities
Provisions
Current Liabilities
Net current Assets
Misc Expenses
TOTAL APPLICATION OF FUNDS

CASH FLOW
(Rs mn)
Reported PAT
Non operating &Interest Income
Depreciation
Non Operating and E0 Items
Working Capital Change

FY10
55,987
(7,651)
10,129
17,198
(35,587)

FY11
66,696
(9,417)
10,835
17,565
(15,257)

FY12E
79,820
(13,885)
11,255
22,140
(17,649)

FY13E
88,307
(15,100)
12,768
25,733
(23,753)

FY14E
98,651
(17,400)
13,534
28,736
(33,021)

OPERATING CASH FLOW ( a )

Capex

40,076
(12,977)

70,422
(10,616)

81,680
(12,000)

87,954
(12,000)

90,499
(12,000)

Free Cash Flow

Investments & Others
INVESTING CASH FLOW ( b )
Capital Issuance
Debt Issuance
Interest
Dividend

27,099
4,921
(8,056)
22
712
(902)
(17,229)

59,806
(42,794)
(53,410)
9
11,394
(1,044)
(17,080)

69,680
13,885
1,885
(23,455)

75,954
15,100
3,100
(25,917)

78,499
17,400
5,400
(28,941)

(6,721)
10,291
789
84,838

(23,455)
60,111
144,949

FINANCING CASH FLOW ( c )

NET CASH FLOW (a+b+c)
Effect of Exchange rate
Closing Cash

(17,397)
14,623
1,680
77,666

(25,917)
65,137
210,086

(28,941)
66,958
277,044

KEY RATIOS
FY10

FY11

FY12E

FY13E

FY14E

GPM

32.2%

32.9%

34.2%

34.2%

34.0%

EBITDA Margin

20.8%

20.5%

22.1%

22.6%

22.5%

EBIT Margin

17.8%

18.0%

19.5%

20.0%

20.1%

APAT Margin

16.5%

16.5%

17.7%

17.7%

17.9%

RoE

21.2%

23.3%

25.7%

23.9%

22.6%

RoCE

18.4%

19.8%

21.9%

20.6%

19.9%

ROIC

25.3%

28.0%

37.2%

41.3%

45.7%

19.8%

21.5%

22.3%

22.5%

22.5%

Asset Turnover (x)

1.09

1.24

1.08

1.07

1.03

Unbilled Revenues

28

29

27

27

26

Debtors (days)

79

65

65

60

60

Payables (days)

23

13

13

14

15

Cash Conversion Cycle (days)

84

81

79

73

71

Debt/EBITDA (x)

0.8

0.8

0.6

0.6

0.5

-0.2

-0.3

-0.4

-0.5

-0.6

EPS (Rs/sh)

21.36

25.01

31.18

35.97

40.14

CEPS (Rs/sh)

25.44

28.98

35.92

41.30

45.78

BV (Rs/sh)

116.1

115.4

138.2

163.6

191.9

DPS

5.7

7.0

8.1

9.0

10.1

P/E

26.0

22.2

17.8

15.5

13.9

4.8

4.8

4.0

3.4

2.9

EV/EBITDA

19.6

16.6

12.7

10.2

8.7

EV/Revenues

4.08

3.40

2.80

2.29

1.96

Dividend Yield (%)

1.0%

1.3%

1.5%

1.6%

1.8%

FCFE/Mcap(%)

1.4%

4.1%

5.1%

5.6%

5.7%

OCF/EV

3.1%

5.5%

6.7%

7.7%

8.4%

FCF/EV

1.5%

4.5%

5.7%

6.6%

7.3%

PROFITABILITY (%)

EFFICIENCY
Tax Rate (%)

Net D/E
Interest Coverage ratio
VALUATION

P/BV

Jan-14

Dec-13

Nov-13

Oct-13

Wipro

Sep- 13

Aug-13

Jul- 13

680

Jun-13

Apr-13
May13

Mar-13

Feb-13

Jan-13

RECOMMENDATION HISTORY
TP

630

580

530

480

430

380

330
280

Date
21-Jan-13
21-Apr-13
29-Jul-13
7-Oct-13
23-Oct-13
20-Jan-14

CMP
397
370
381
483
515
557

Reco
UPF
UPF
BUY
BUY
BUY
BUY

Target
413
359
438
510
550
640

Rating Definitions
BUY : Where the stock is expected to deliver more than 10% returns over the
next 12 month period
NEUTRAL: Where the stock is expected to deliver (-)10% to 10% returns over the
next 12 month period
SELL : Where the stock is expected to deliver less than (-)10% returns over the
next 12 month period
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