2QFY2012 Result Update | IT

October 31, 2011

Wipro
Performance Highlights
(` cr) Net revenue EBITDA EBITDA margin (%) PAT 2QFY12 9,095 1,740 19.1 1,301 1QFY12 8,564 1,729 20.2 1,335 % chg (qoq) 6.2 0.6 (106)bp (2.5) 2QFY11 7,730 1,600 20.7 1,285 % chg (yoy) 17.6 8.7 (157)bp 1.3

NEUTRAL
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code IT 89,909 0.9 496/310 146,841 2 17,705 5,327 WIPR.BO WPRO@IN

`366 -

Source: Company, Angel Research

For 2QFY2012, Wipro reported better-than-expected results with the major highlight being 6.0% qoq volume growth (aided by SAICs revenue). The disappointment came from the price realization front, which declined by 0.4% and 4.1% qoq onsite as well as offshore in constant currency (CC) terms, respectively. During 2QFY2012, the companys growth was modest on account of revenue from SAIC; however, organically Wipro continues to lag its peers. We maintain our Neutral rating on the stock. Quarterly highlights: For 2QFY2012, Wipro registered 6.2% qoq growth in revenue to `9,095cr. Revenue from the IT services segment came in at US$1,472.5mn, up merely 4.6% qoq. This includes revenue of US$46mn from SAIC. Excluding this, revenue growth was merely 2.9% qoq. Revenue from the consumer care and lightening segment grew strongly by 20.3% yoy, while the IT products segment reported a 6.4% yoy decline in revenue. EBIT margin of the IT services and consumer care and lightening segments fell by 200bp and 84bp qoq to 20.0% and 11.0%, respectively; while for IT products, EBIT margin increased by 30bp qoq to 4.5%. Overall, EBIT margin declined by 110bp qoq to 16.4%. Outlook and valuation: Management has given a decent revenue guidance of US$1.500bn-1.530bn for 3QFY2012 for the IT services segment, with qoq growth of 2-4%, which is slightly less than its peers. Also, management maintained that the company will take another 1-2 quarters to grow at rates comparable to its peers. This implies poor annual growth for FY2012. Thus, we expect revenue CAGR for IT services (USD terms) to be muted at 12.9% over FY2011-13E. At the operating front, Wipro has limited tailwinds and headwinds such as wage inflation, integration impact of SAIC (lower EBIT margin at 13.5%) and moderate volume growth, which are expected to pull down margins. Thus, we expect EBIT margin of the IT services segment to slide down to 17.0% in FY2012 and 16.2% in FY2013. We value the company at 15.3x FY2013E EPS (15% discount to Infosys) of `24.4, which gives us a target price of `373. We maintain our Neutral rating on the stock.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 79.2 4.2 5.1 11.5

Abs. (%) Sensex Wipro

3m

1yr

3yr 80.9

(2.7) (11.6)

(6.0) (12.7) 124.4

Key financials (Consolidated, IFRS)

Y/E March (` cr) Net sales % chg Net profit % chg EBITDA margin (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x) FY2009* 25,534 27.8 3,876 18.1 19.7 15.9 23.0 5.5 28.4 15.2 3.3 17.0 FY2010* 27,124 6.2 4,594 18.5 21.9 18.9 19.4 4.1 23.4 15.6 3.0 13.9 FY2011 31,099 14.7 5,297 15.3 21.2 21.7 16.9 3.7 22.0 15.5 2.6 12.3 FY2012E 36,554 17.5 5,389 1.7 19.7 22.0 16.7 3.2 19.4 14.8 2.2 11.2 FY2013E 39,657 8.5 5,985 11.1 18.8 24.4 15.0 2.8 18.6 13.6 1.9 10.2

Srishti Anand
+91 22 3935 7800 Ext: 6820 srishti.anand@angelbroking.com

Ankita Somani
+91 22 3935 7800 Ext: 6819 ankita.somani@angelbroking.com

Source: Company, Angel Research; Note: *Adjusted for 2:3 bonus

Please refer to important disclosures at the end of this report

Wipro | 2QFY2012 Result Update

Exhibit 1: 2QFY2012 performance (Consolidated, IFRS)

Y/E March (` cr) Net revenue Cost of revenue Gross profit SG&A expense EBITDA Dep. and amortisation EBIT Other income PBT Income tax PAT Minority interest Adj. PAT Diluted EPS (`) Gross margin (%) EBITDA margin (%) EBIT margin (%) PAT margin (%)
Source: Company, Angel Research

2QFY12 9,095 6,246 2,849 1,109 1,740 252 1,488 86 1,584 284 1,300 (1) 1,301 5.3 31.3 19.1 16.4 15.3

1QFY12 8,564 5,768 2,796 1,067 1,729 234 1,495 143 1,649 310 1,340 5 1,335 5.4 32.6 20.2 17.5 17.3

% chg (qoq) 6.2 8.3 1.9 3.9 0.6 7.8 (0.5) (4.0) (8.2) (3.0) (120.4) (2.5) (2.0) (132)bp (106)bp (110)bp (201)bp

2QFY11 7,730 5,130 2,600 1,000 1,600 197 1,403 96 1,518 218 1,300 15 1,285 5.3 33.6 20.7 18.2 16.8

% chg (yoy) 17.6 21.7 9.6 10.9 8.7 28.0 6.0 4.4 30.1 (106.8) 1.3 0.9 (231)bp (157)bp (179)bp (156)bp

1HFY12 17,659 12,014 5,644 2,176 3,469 486 2,983 230 3,233 594 2,640 4 2,636 10.8 32.0 19.6 16.9 16.2

1HFY11 14,967 10,192 4,775 1,538 3,238 385 2,852 190 3,078 453 2,625 22 2,603 10.7 31.9 21.6 19.1 18.7

% chg (yoy) 18.0 17.9 18.2 41.5 7.1 26.1 4.6 5.1 31.1 0.6 (81.9) 1.2 0.6 6bp (199)bp (217)bp (244)bp

Exhibit 2: 2QFY2012 Actual vs. Angel estimates

(` cr) Net revenue EBITDA margin (%) PAT
Source: Company, Angel Research

Actual 9,095 19.1 1,301

Estimate 8,923 17.7 1,225

Variation (%) 1.9 148bp 6.2

Decent results
For 2QFY2012, Wipros IT services revenue came in higher than expected at US$1,472.5mn, up merely 4.6% qoq, primarily led by volume growth of 6.0% qoq. However, pricing (on a reported basis) onsite and offshore again declined by 0.4% and 4.1% qoq, respectively, due to closure of few fixed price projects during the quarter. In CC terms, offshore pricing declined by 3.5% qoq, while onsite pricing remained almost flat qoq. Pricing declined because of portfolio effect as revenue from America, which has got higher price points, grew by merely 2.2% qoq in CC terms, while revenue from APAC, which typically has lower price points, grew by 13.9% qoq in CC terms. The revenue figures include US$46mn from SAICs oil and gas business, which Wipro acquired in April 2011 and got fully integrated in 2QFY2012. On an organic basis (excluding SAIC), revenue growth stood at 2.9% qoq. Volume growth for the global IT business of the IT services segment came in at 6.0% qoq, led by whopping 9.0% qoq growth in onsite volumes; offshore volume growth was at 4.7% qoq. On an organic basis, volume growth stood at 4.6% qoq. In 2QFY2012, unfavorable cross-currency movement impacted Wipros IT services revenue by US$13mn as USD appreciated against GBP, Euro and AUD on a qoq basis. In CC terms, the IT services segments revenue came in at US$1,485mn, up 5.5% qoq. In INR terms, revenue of the IT services segment came in at `6,829cr, up 6.6% qoq.
October 31, 2011

Wipro | 2QFY2012 Result Update

Exhibit 3: Volume trend (Effort wise)

12 9.0 9 7.4
(%)

6 3 0 2QFY11 (3) Onsite 3QFY11 4.4 4.0 2.8 0.5 (0.4) 4QFY11

5.8 4.7

0.2 1QFY12 2QFY12

Offshore

Source: Company, Angel Research

Exhibit 4: Pricing trend (Effort wise, CC basis)

4 2.5 2 (0.4) 0
(%)

0.9 (0.8) (0.9) (1.7) (4.1) 0.4 (1.2) (0.4)

(2) (4) (6)

2QFY11

3QFY11 Onsite

4QFY11 Offshore

1QFY12

2QFY12

Source: Company, Angel Research

Service wise, Wipro witnessed modest revenue growth across its discretionary service verticals. Technology infrastructure services (contributed 22.1% to revenue), analytics and information management (contributed 6.6% to revenue), product engineering and mobility (contributed 8.4% to revenue) and consulting (contributed 3.2% to revenue) reported 6.4%, 7.3%, 5.7% and 5.7% qoq growth, respectively. Revenue from business application services (contributed 30.5% to revenue) also grew by 5.1% qoq. Other service verticals such as application development and maintenance (ADM) and R&D business posted 3.4% and 4.7% qoq growth in revenue, respectively; however, the BPO segment reported a 0.9% qoq decline in revenue during the quarter. Discretionary services typically have higher price points than normal business operations type services. For Wipro, even when growth was reported in discretionary services, pricing declined which is a concern. So going ahead, even if the company ramps up in annuity-based services, which are typical business operations type, the fear of price decline is higher, which will eventually lead to erosion in revenue growth.

October 31, 2011

Wipro | 2QFY2012 Result Update

Exhibit 5: Revenue growth (Service wise)

Service verticals Technology infrastructure services Analytics and information management Business application services BPO Product engineering and mobility ADM R&D business Consulting
Source: Company, Angel Research

% to revenue 22.1 6.6 30.5 8.8 8.4 23.6 12.5 3.2

% growth (qoq) % growth (yoy) 6.4 7.3 5.1 (0.9) 5.7 3.4 4.7 5.7 20.6 31.7 16.7 4.5 11.6 12.4 0.9 27.9

Industry wise, Wipros growth was led by energy and utilities (contributed 13.7% to revenue), which reported 24.0% qoq growth (CC terms). This growth in the energy and utilities segment was majorly due to acquisition of SAICs oil and gas business, which contributed US$46mn to the companys overall revenue. Organically, growth in this segment stood muted. Revenue from the companys anchor vertical, financial services (contributed 27.1% to revenue), reported 6.9% qoq growth. The company is seeing some amount of softness in IT spend coming from investment banks of Europe; however, no delays are seen in any other areas. Revenue from retail and transportation, manufacturing and hi-tech and healthcare, lifesciences and services grew by 3.8%, 1.2% and 1.8% qoq (CC terms), respectively. On the other hand, global media and telecom (contributed 15.7% to revenue) reported a 0.6% qoq decline (CC terms) in revenue. Management indicated that in the telecom industry, the equipment manufacturers space is still challenged in terms of IT spend; service providers are looking into new opportunities, which might kick in some amount of IT spend from the telecom industry.

Exhibit 6: Revenue growth (Service wise CC basis)

% to revenue Global media and telecom Financial solutions Manufacturing and hi-tech Healthcare, life sciences and services Retail and transportation Energy and utilities
Source: Company, Angel Research

% growth (qoq) (0.6) 6.9 1.2 1.8 3.8 24.0

% growth (yoy) 5.5 14.6 3.2 3.0 7.5 72.9

15.7 27.1 19.0 9.8 14.7 13.7

Geography wise, Wipro reported increased revenue from all geographies. Revenue from Japan, which took a major hit in 1QFY2012 due to natural calamities, posted whopping 16.2% qoq (CC terms) growth. Revenue from developing geographies India and Middle East and APAC grew by 11.6% and 13.9% qoq (CC terms), respectively. Revenue from America and Europe increased by 2.2% and 6.8% qoq (CC terms), respectively.

October 31, 2011

Wipro | 2QFY2012 Result Update

Exhibit 7: Revenue growth (Geography wise, CC basis)

% to revenue America Europe Japan India and Middle East APAC and other emerging markets
Source: Company, Angel Research

% growth (qoq) 2.2 6.8 16.2 11.6 13.9

% growth (yoy) 6.7 20.7 (6.1) 21.4 34.1

51.7 28.8 1.3 9.3 8.9

Segmental performance
During the quarter, the IT services segments revenue came in at US$1,472.5mn (including US$46n from SAIC), up 4.6% qoq, with India and Middle East business, being the major growth driver, posting 7.5% qoq growth with revenue coming at US$248mn. Revenue from Global IT business and BPO came in at US$1,095mn and US$130mn, up 4.7% and down 0.9% qoq, respectively.

Exhibit 8: IT services Revenue growth (qoq)

16 12 8
(%)

14.1 9.8 6.5 5.7 7.7 4.5 5.6 2.7 0.2 2QFY11 3QFY11 4QFY11 4.2 2.3 0.5 1QFY12 (4.2) (4.4) Global IT India and Middle East BPO IT services 7.5 4.7 4.6 (0.9) 2QFY12

4 0 (4) (8)

4.2 2.6

Source: Company, Angel Research

Exhibit 9: Global IT services revenue trend

7 6 5 5.7 6.6 5.6 4.2 4.6 1.9 1.8 0.5 6.0

(%)

4 3 2 1 0 2QFY11 3QFY11 4QFY11 1QFY12 1.5

2QFY12

Global IT volume growth

Source: Company, Angel Research

IT services revenue growth (in USD)

October 31, 2011

Wipro | 2QFY2012 Result Update

The IT products segment reported a 6.4% yoy decline in revenue to `1,001cr during the quarter. The consumer care and lightening segment emerged as the primary growth driver for the company by posting 20.3% yoy growth in revenue to `800cr, with Yardley, Santoor and Chandrika bolstering growth. In the lightening business, Wipro is gaining traction in its eco energy business, which involves managing energy through use of renewable products.

Exhibit 10: IT products Revenue growth (yoy)

1,200 1,100 1,000 1,069 1,006 879 (9.8) (13.1) 2QFY11 3QFY11 IT products
Source: Company, Angel Research

20.9

25

15 1,001

(` cr)

911 2.3 (6.4)

800 700 600

(5)

(15) 4QFY11 1QFY12 yoy growth (%) 2QFY12

Exhibit 11: Consumer care and lightening Revenue growth (yoy)

850 800 750 19.6 19.1 724 695 665 17.6 755 21.0 800 20.3 22 21 20

(` cr)

650 600 550 500

18 17 16 15

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

Consumer care and lightening

Source: Company, Angel Research

yoy growth (%)

On a consolidated level, Wipros revenue came in at `9,095cr (vs. our expectation of `8,923cr), up 6.2% qoq.

Hiring and utilization

Net additions during the quarter were strong at 5,240 employees, taking the total employee base to 1,31,730. This also includes ~1,450 employees acquired from SAIC. Voluntary attritions (annualized) declined to 18.5% from 23.2% in 1QFY2012 in global IT. Also, attrition rate (quarterly) in BPO declined to 14.1% in 2QFY2012 from 15.3% 1QFY2012.

October 31, 2011

(%)

700

19

(%)

900

Wipro | 2QFY2012 Result Update

Exhibit 12: Employee pyramid

Employee pyramid Utilization Global IT (%) Attrition (%) Global IT BPO Net additions
Source: Company, Angel Research

2QFY11 70.9 23.5 14.2 2,975

3QFY11 68.6 21.7 14.2 3,591

4QFY11 68.9 20.9 15.5 2,894

1QFY12 69.7 23.2 15.3 4,105

2QFY12 69.3 18.5 14.1 5,240

Utilization rate of the global IT business decreased by 40bp qoq to 69.3%. As per managements plans, of the total hiring to be done in FY2012, 70% would be freshers, which in turn would not give utilization level much headroom to scale up from current levels in the next couple of quarters.

Margins decline
EBIT margin for IT services declined by 200bp qoq to 20.0% due to 1) negative impact of wage hikes given from June 1, 2011, and 2) lower operating margin of SAIC. However, these negative impacts were partially offset by higher INR realization by the company. EBIT margin for the consumer care and lightening segment continued its declining momentum and dropped off by 84bp qoq to 11.0%. However, EBIT margin of the IT products business improved by 30bp qoq to 4.2%. On a consolidated level, Wipros EBITDA and EBIT margins declined by 106bp and 110bp qoq to 19.1% and 16.4%, respectively.

Exhibit 13: Segment-wise EBIT margin trend

25 20 15
(%)

22.2 18.2 12.5

22.2 18.3

22.1

22.0 20.0 17.8 12.0 17.5 11.9 16.4 11.0 4.5

12.3

10 5 0 2QFY11 IT services 3QFY11 IT products 4QFY11 1QFY12 5.0 4.6 3.6 4.2

2QFY12 Consolidated

Consumer care and lightening

Source: Company, Angel Research

Client pyramid
Wipro added 44 new clients in 2QFY2012, with its active client base standing at 930 in 2QFY2012. The companys client pyramid witnessed a slight qualitative improvement, with one client getting added in the US$100mn plus revenue bracket. Few clients from the US$5mn-10mn revenue bracket moved to the higher revenue brackets.

October 31, 2011

Wipro | 2QFY2012 Result Update

Exhibit 14: Client metrics

Particulars US$100mn plus US$75mn$100mn US$50mn$75mn US$20mn$50mn US$10mn$20mn US$5mn$10mn US$3mn$5mn US$1mn$3mn New clients Active customers
Source: Company, Angel Research

2QFY11 1 8 11 43 43 58 80 181 29 890

3QFY11 1 9 11 43 49 63 78 179 36 880

4QFY11 3 9 10 46 49 63 75 174 68 904

1QFY12 4 8 12 45 49 77 63 180 49 937

2QFY12 5 8 11 46 50 72 75 195 44 930

Outlook and valuation

Management has given a decent revenue guidance of US$1.500bn-1.530bn for 3QFY2012 for the IT services segment, with qoq growth of 2-4%, which is slightly less than its peers. Also, management maintained that the company will take another 1-2 quarters to grow at rates comparable to its peers. This implies poor annual growth for FY2012. Thus, we expect revenue CAGR for IT services (USD terms) to be muted at 12.9% over FY2011-13E, underperforming not only tier-I IT companies but also tier-II IT companies such as Hexaware Technologies, Mahindra Satyam and MindTree. At the operating front, Wipro has limited tailwinds and headwinds such as wage inflation, integration impact of SAIC (lower EBIT margin at 13.5%) and moderate volume growth, which are expected to pull down margins. Utilization, the companys margin lever, is expected to be partially capped as the company targets to have ~70% of its gross hires as freshers. Also, the company plans to continue making investments in S&M. Thus, we expect EBIT margin of the IT services segment to slide down to 17.0% in FY2012 and 16.2% in FY2013. Also, the ~400bp increase in effective tax rate is expected to mar the companys net profitability further, and we expect only a 6.3% CAGR in PAT over FY2011-13E. Thus, we value the company at 15.3x FY2013E EPS (15% discount to Infosys) of `24.4, which gives us a target price of `373. We maintain our Neutral rating on the stock.

Exhibit 15: Key assumptions

FY2012 Revenue growth IT services (USD) USD-INR rate (realised) Revenue growth Consolidated (`) EBITDA margin (%) Tax rate (%) EPS growth (%)
Source: Company, Angel Research

FY2013 8.7 46.0 8.5 18.8 20.0 6.1

13.8 46.4 17.5 19.7 18.7 1.4

October 31, 2011

Wipro | 2QFY2012 Result Update

Exhibit 16: Change in estimates

FY2012E Parameter (` cr) Net revenue EBITDA Other income PBT Tax PAT Earlier estimates 35,732 6,657 740 6,481 1,228 5,233 Revised estimates 36,554 7,199 392 6,642 1,241 5,389 Variation (%) 2.3 8.1 (47.0) 2.5 1.1 3.0 Earlier estimates 39,178 7,172 1,326 7,518 1,504 5,994 FY2013E Revised estimates 39,657 7,448 1,045 7,501 1,500 5,985 Variation (%) 1.2 3.9 (21.2) (0.2) (0.2) (0.2)

Source: Company, Angel Research

Exhibit 17: One-year forward PE chart

950 800 650

(`)

500 350 200 50

Oct-06

Oct-07

Oct-08

Oct-09

Oct-10

Price
Source: Company, Angel Research

34x

28x

21x

14x

7x

October 31, 2011

Oct-11

Apr-06

Apr-07

Apr-08

Apr-09

Apr-10

Apr-11

Wipro | 2QFY2012 Result Update

Exhibit 18: Recommendation summary

Company HCL Tech Hexaware Infosys Infotech Enterprises KPIT Cummins Mahindra Satyam MindTree Mphasis NIIT Persistent TCS Tech Mahindra Wipro Reco. Buy Accumulate Neutral Accumulate Neutral Accumulate Buy Buy Buy Neutral Buy Buy Neutral CMP (`) 412 87 2,723 114 167 70 381 319 46 315 1,048 571 366 Tgt. price (`) 545 92 127 79 462 382 60 1,220 734 Upside (%) 32.2 5.7 11.4 13.4 21.2 19.8 29.2 16.4 28.5 Target P/E (x) 14.0 11.0 18.0 8.5 10.0 11.0 10.0 11.5 7.5 9.0 20.0 9.0 15.3 FY2013E EBITDA (%) 17.7 16.8 30.6 15.7 15.4 14.6 14.4 15.5 16.3 20.0 28.7 16.3 18.8 FY2013E P/E (x) 10.6 10.6 17.3 7.6 10.2 9.7 8.3 8.1 5.8 8.6 17.2 7.0 15.3 FY2011-13E EPS CAGR (%) 26.1 68.7 14.8 8.9 19.9 30.4 35.6 0.4 19.3 2.5 17.0 28.5 5.0 FY2013E RoCE (%) 20.6 18.1 24.0 15.0 18.6 10.8 18.6 13.4 11.0 15.8 29.8 13.6 13.6 FY2013E RoE (%) 22.4 18.8 22.5 12.4 17.1 13.5 16.5 14.5 15.6 14.8 30.9 20.2 18.6

Source: Company, Angel Research

October 31, 2011

10

Wipro | 2QFY2012 Result Update

Profit & Loss account (Consolidated, IFRS)

Y/E March (` cr) Net revenue Cost of revenues Gross profit % of net sales Selling and mktg exp. % of net sales General and admin exp. % of net sales Depreciation and amortization % of net sales EBIT % of net sales Other income, net Share in profits of eq. acc. ass. Profit before tax Provision for tax % of PBT PAT Share in earnings of associate Minority interest Adj. PAT Diluted EPS (`)
Note: *Adjusted for 2:3 bonus

FY2009* 25,534 18,022 7,512 29.4 1,737 6.8 1,445 5.7 695 2.7 4,330 17.0 123 36.2 4,490 604 13.4 3,886 10 3,876 15.9

FY2010* 27,124 18,630 8,494 31.3 1,861 6.9 1,482 5.5 783 2.9 5,151 19.0 337 53 5,541 929 16.8 4,612 18 4,594 18.9

FY2011 31,099 21,285 9,814 31.6 2,218 7.1 1,829 5.9 821 2.6 5,767 18.5 472 64.8 6,303 971 15.4 5,332 35 5,297 21.7

FY2012E 36,554 25,844 10,711 29.3 2,636 7.2 1,872 5.1 996 2.7 6,203 17.0 392 46.9 6,642 1,241 18.7 5,400 12 5,389 22.0

FY2013E 39,657 28,176 11,481 28.9 2,975 7.5 2,100 5.3 1,044 2.6 6,405 16.2 1,045 52 7,501 1,500 20.0 6,001 16 5,985 24.4

October 31, 2011

11

Wipro | 2QFY2012 Result Update

Balance sheet (Consolidated, IFRS)

Y/E March ( cr) Assets Goodwill Intangible assets Property, plant & equipment Invstment in equ. acc. investees Derivative assets Non-current tax assets Deferred tax assets Other non-current assets Total non-current assets Inventories Trade receivables Other current assets Unbilled revenues Available for sale investments Current tax assets Derivative assets Cash and cash equivalents Total current assets Total assets Equity Share capital Share premium Retained earnings Share based payment reserve Other components of equity Shares held by controlled trust Equity attrib. to shareholders of Co. Minority interest Total equity Liabilities Long term loans and borrowings Deferred tax liability Derivative liabilities Non-current tax liability Other non-current liabilities Provisions Total non-current liabilities Loans and bank overdraft Trade payables Unearned revenues Current tax liabilities Derivative liabilities Other current liabilities Provisions Total current liabilities Total liabilities Total equity and liabilities
Note: *Adjusted for 2:3 bonus

FY2009* FY2010* FY2011 FY2012E FY2013E 5,614 349 4,979 167 437 808 12,355 759 4,865 1,494 1,411 1,654 983 4,912 16,078 28,433 293 2,728 12,665 375 (1,292) (54) 14,714 24 14,738 1,968 47 311 877 167 3370.2 3,721 4,165 873 649 326 590 10,324 13,695 28,433 5,380 401 5,346 235 120 346 169 878 12,875 793 5,093 2,111 1,671 3,042 660 262 6,488 20,118 32,993 294 2,919 16,579 314 (440) (54) 19,611 44 19,655 1,811 38 288 307 323 10 2776.7 4,440 3,875 746 485 138 650 227 10,561 13,338 32,993 5,482 355 5,509 299 298 924 147 898 13,913 971 6,163 1,974 2,415 4,928 496 171 6,114 23,231 37,144 491 3,012 20,325 136 58 (54) 23,968 69 24,037 1,976 30 259 502 271 8 3045.3 3,304 4,405 660 734 136 591 232 10,062 13,107 37,144 6,050 500 5,513 450 440 1,161 250 1,200 15,564 1,152 7,611 2,857 2,504 6,192 700 210 5,066 26,292 41,856 491 3,100 23,991 100 80 (54) 27,708 82 27,790 2,025 50 200 600 330 12 3217 3,758 4,956 600 650 105 600 180 10,849 14,066 41,856 6,050 500 5,470 400 500 1,188 300 1,400 15,808 1,195 7,931 2,509 2,608 8,876 800 200 7,262 31,381 47,190 491 3,150 28,253 100 100 (54) 32,040 100 32,140 2,025 70 200 700 400 16 3411 3,800 5,404 700 765 100 700 170 11,639 15,050 47,190

October 31, 2011

12

Wipro | 2QFY2012 Result Update

Cash flow statement (Consolidated, IFRS)

Y/E March (` cr) Pre tax profit from operations Depreciation Expenses (deffered)/written off Pre tax cash from operations Other income/prior period ad Net cash from operations Tax Cash profits (Inc)/dec in current assets Inc/(dec) in current liab. Net trade working capital Cashflow from oper. actv. (Inc)/dec in fixed assets (Inc)/dec in intangibles (Inc)/dec in investments (Inc)/dec in net def. tax assets (Inc)/dec in derivative assets (Inc)/dec in non-current tax asset (Inc)/dec in minority interest Inc/(dec) in other non-current liab (Inc)/dec in other non-current ast. Cashflow from investing activities Inc/(dec) in debt Inc/(dec) in equity/premium Dividends Cashflow from financing activities Cash generated/(utilised) Cash at start of the year Cash at end of the year
Note: *Adjusted for 2:3 bonus

FY2009* 4,366 695 (10) 5,051 123 5,174 (604) 4,571 (3,510) 1,633 (1,877) 2,694 (1,726) (1,514) (162) (437) 12 1,128 730 (1,969) 1,968 (1,023) (686) 260 985 3,927 4,912

FY2010* FY2011 5,204 783 (18) 5,969 337 6,306 (929) 5,377 (1,076) 237 (840) 4,537 (1,150) 182 (1,455) 268 (120) (346) 20 (436) (70) (3,107) (157) 982 (679) 146 1,576 4,912 6,488 5,832 821 (35) 6,618 472 7,090 (971) 6,119 (1,601) (499) (2,101) 4,018 (985) (56) (1,951) 22 (178) (578) 25 103 (20) (3,616) 165 617 (1,558) (775) (374) 6,488 6,114

FY2012E 6,250 996 (12) 7,234 392 7,626 (1,241) 6,385 (2,845) 787 (2,057) 4,327 (1,000) (713) (1,414) (103) (142) (237) 13 123 (302) (3,775) 49 74 (1,723) (1,600) (1,048) 6,114 5,066

FY2013E 6,457 1,044 (16) 7,484 1,045 8,529 (1,500) 7,029 (209) 789 580 7,609 (1,000) (2,634) (50) (60) (28) 18 194 (200) (3,760) 70 (1,723) (1,653) 2,196 5,066 7,262

October 31, 2011

13

Wipro | 2QFY2012 Result Update

Key Ratios
Y/E March Valuation ratio(x) P/E (on FDEPS) P/CEPS P/BVPS Dividend yield (%) EV/Sales EV/EBITDA EV/Total assets Per share data (`) EPS (Fully diluted) Cash EPS Dividend Book value DuPont analysis Tax retention ratio (PAT/PBT) Cost of debt (PBT/EBIT) EBIT margin (EBIT/Sales) Asset turnover ratio (Sales/Assets) Leverage ratio (Assets/Equity) Operating ROE Return ratios (%) RoCE (pre-tax) Angel RoIC RoE Turnover ratios (x) Asset turnover(fixed assets) Receivables days Payable days
Note: *Adjusted for 2:3 bonus

FY2009* 23.0 9.8 5.5 1.1 3.3 17.0 3.0 15.9 37.3 4.0 67.0 0.9 6.5 0.0 0.9 1.9 26.4 15.2 26.6 28.4 1.0 64 71

FY2010* 19.4 8.3 4.1 1.1 3.0 13.9 2.5 18.9 44.3 4.0 89.3 0.8 7.1 0.0 0.8 1.7 23.5 15.6 28.5 23.4 0.9 67 79

FY2011 16.9 8.1 3.7 1.6 2.6 12.3 2.2 21.7 45.1 6.0 98.0 0.8 7.7 0.0 0.8 1.5 22.2 15.5 28.0 22.0 0.9 66 71

FY2012E 16.7 7.8 3.2 1.6 2.2 11.2 1.9 22.0 47.2 6.0 113.2 0.8 6.7 0.0 0.9 1.5 19.5 14.8 25.3 19.4 0.9 69 66

FY2013E 15.0 7.3 2.8 1.6 1.9 10.2 1.6 24.4 50.5 6.0 131.0 0.8 7.2 0.0 0.8 1.5 18.7 13.6 25.6 18.6 0.9 72 67

October 31, 2011

14

Wipro | 2QFY2012 Result Update

Research Team Tel: 022 - 3935 7800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Wipro No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

October 31, 2011

15