Accumulate Wipro on dips; target Rs 500: Bonanza

Bonanza has recommended to accumulate Wipro on dips near Rs 395 with a medium term target of Rs 500 in its report dated June 16, 2009.

“Wipro is the second largest IT service vendor in the Indian Market behind IBM. We expect the company to leverage its strong presence in India and continue to bag multiple contracts in the coming months, which would aid Wipro in reporting incremental revenues in the coming years. The company has bagged Six and a Half year contract worth Rs 1182 crore from Employee State Insurance Corporation. Order worth Rs 200 crore from LIC. Company bagged order from Unitech wireless executable over a period of Nine years for an undisclosed sum. Company has reported a growth of more than 28% in its topline for FY09.”

“Going ahead, with orders form Indian Sector improving and Clients in US and Europe also seeking a reduction in cost and opting for out sourcing Company’s topline is expected to improve in the coming years and expansion of profit margins can also not be ruled out. At current market price the stock is trading at an earning multiple of 13.89 x for TTM EPS of 26.64. We recommend investor to gradually accumulate the scrip on dips near Rs 395 with a target of Rs 500 in the medium term,” says Bonanza’s report.

source: Moneycontorol

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