1QFY2012 Result Update | IT

July 20, 2011

Wipro
Performance Highlights
(` cr) Net revenue EBITDA EBITDA margin (%) PAT 1QFY12 8,564 1,729 20.2 1,335 4QFY11 8,302 1,707 20.6 1,375 % chg (qoq) 3.1 1.3 (37)bp (3.0) 1QFY11 7,236 1,638 22.6 1,318 % chg (yoy) 18.3 5.6 (244)bp 1.2

ACCUMULATE
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 97,797 0.8 500/328 156,273 2 18,502 5,567 WIPR.BO WPRO@IN

`399 `419
12 Months

Source: Company, Angel Research

For 1QFY2012, Wipro reported lower-than-expected results. The major disappointment came from the price realisations front, which declined by 1.7% and 1.2% qoq for onsite as well as offshore in constant currency (CC) terms, respectively. During 1QFY2012, Wipros IT services revenue came in at US$1.408bn, while Cognizant has given a revenue guidance of at least US$1.45bn for the quarter (results not yet out), which (if achieved) makes Cognizant the third largest Indian IT player. Revenue guidance for Wipros IT services segment for 2QFY2012 looks lacklustre at US$1.436bn1.464bn, only 24% qoq growth, as 2Q is seasonally the strongest quarter for IT companies. Wipro continues to lag its peers and is undergoing new organisational restructuring at the top end. Thus, we expect volumes to remain tepid. Accordingly, we downgrade our recommendation to Accumulate from Buy. Quarterly highlights: For 1QFY2012, Wipro registered 3.1% qoq growth in revenue to `8,564cr. Volume growth of the IT services segment came in tepid at 1.8% qoq. Revenue from IT products and consumer care and lightening segments grew strongly by 20.9% and 17.6% yoy, respectively. EBIT margin of the IT services and consumer care and lightening segments fell by 10bp and 22bp qoq to 22.0% and 11.9%, respectively; while for IT products, EBIT margin increased by 56bp qoq to 4.2%. Overall EBIT margin declined by 35bp qoq to 17.5%. Outlook and valuation: In FY2011, Wipro added incremental revenue of only US$830mn vis--vis Infosys, TCS and Cognizant (in CY2010) adding US$1.23bn, US$1.83bn and US$1.31bn, respectively. Further, management guided for revenue growth of only 24% qoq for 2QFY2012. Management maintained that it will take another 23 quarters to grow at rates comparable to its peers. Thus, we expect revenue CAGR for IT services (US$ terms) to be muted at 15% (17.4% earlier) over FY201113E, underperforming not only tier-I companies but also tier-II companies such as KPIT, Persistent and Hexaware. We value Wipro at 16x FY2013E EPS of `26.2 and downgrade our rating to Accumulate from Buy with a target price of `419.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 79.2 3.7 5.4 11.7

Abs. (%) Sensex Wipro

3m (5.0)

1yr 3.5

3yr 35.7 81.7

(14.1) (2.2)

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 25.0 6.0 28.4 15.2 3.7 18.6 FY2010* 27,124 6.2 4,594 18.5 21.9 18.9 21.1 4.5 23.4 15.6 3.3 15.2 FY2011 31,099 14.7 5,297 15.3 21.2 21.7 18.4 4.1 22.0 15.5 2.9 13.5 FY2012E 35,905 15.5 5,300 0.0 18.8 21.6 18.5 3.5 19.1 13.6 2.4 12.8 FY2013E 41,339 15.1 6,428 21.3 18.7 26.2 15.2 3.0 19.8 13.8 2.0 10.4

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 | 1QFY2012 Result Update

Exhibit 1: 1QFY2012 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

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

4QFY11 8,302 5,512 2,790 1,083 1,707 228 1,479 149 1,642 260 1,381 6 1,375 5.6 33.6 20.6 17.8 18.4

% chg (qoq) 3.1 4.6 0.2 (1.5) 1.3 2.5 1.1 0.5 18.9 (3.0) (16.9) (3.0) (3.0) (96)bp (37)bp (35)bp (110)bp

1QFY11 7,236 4,676 2,560 923 1,638 188 1,449 95 1,560 235 1,325 7 1,318 5.4 35.4 22.6 20.0 18.3

% chg (yoy) 18.3 23.4 9.2 15.6 5.6 24.1 3.2 5.8 32.0 1.1 (26.9) 1.2 0.4 (273)bp (244)bp (257)bp (105)bp

FY2011 31,099 20,464 10,635 4,047 6,588 821 5,767 472 6,303 971 5,332 35 5,297 21.7 34.2 21.2 18.5 18.6

FY2010 27,124 17,847 9,277 3,343 5,934 783 5,151 337 5,541 929 4,612 18 4,594 18.9 34.2 21.9 19.0 18.2

% chg (yoy) 14.7 14.7 14.6 21.1 11.0 4.9 11.9 13.8 4.5 15.6 87.5 15.3 14.8 (1)bp (69)bp (45)bp 37bp

Exhibit 2: 1QFY2012 Actual vs. Angel estimates

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

Actual 8,564 20.2 1,335

Estimate 8,335 20.6 1,363

Variation (%) 2.7 (38)bp (2.1)

Mixed bag results

For 1QFY2012, Wipros IT services revenue came in lower than expected at US$1,408mn (vs. our expectation of US$1,416mn), up merely 0.5% qoq, because of a decline in price realisations onsite as well as offshore. In CC terms, price points onsite and offshore declined by 1.7% and 1.2% qoq, respectively. On a reported basis also, onsite and offshore pricing declined by 0.8% and 0.4% qoq, respectively. Pricing declined because of portfolio effect as revenue from America, which has got higher price points, declined by 1.3% in CC terms, while revenue from APAC, which typically has lower price points, grew by 6.6% qoq in CC terms. The revenue figures include US$10mn from SAICs oil and gas business, which Wipro acquired in April 2011. The full quarter impact of US$40mn because of SAIC will flow in 2QFY2012. Volume growth for the global IT business of the IT services segment came in at 1.8% qoq, led by 5.8% qoq growth in onsite volumes; offshore volume growth was tepid at merely 0.2% qoq. On an organic basis, volume growth stood at 1.4% qoq. Along with volume growth, cross-currency movement also aided Wipros IT services revenue by US$12mn as USD depreciated against GBP, Euro and AUD by
July 20, 2011

Wipro | 1QFY2012 Result Update

1.8%, 5.2% and 5.7% qoq, respectively, in 1QFY2012. In CC terms, the IT services segments revenue came in at US$1,396mn, down 0.3% qoq. In rupee terms, revenue of the IT services segment came in at `6,405cr, up 1.8% qoq; rupee growth was higher than dollar growth despite 1.0% INR appreciation against USD in 1QFY2012 due to the companys policy of cash flow hedging, which led to higher rupee realisation compared to the average rate for the quarter.

Exhibit 3: Volume trend (Effort wise)

18 15 12
(%)

16.3

9 6 3 0 (3) 1QFY11 0.6

7.4 4.0 4.4 0.5 2QFY11 Onsite 3QFY11 2.8 (0.4) 4QFY11 Offshore

5.8

0.2 1QFY12

Source: Company, Angel Research

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

4 2.5 2 (0.1) (0.4) (0.9) (3.5) (4) 1QFY11 2QFY11 Onsite
Source: Company, Angel Research

0.9 (0.8) 0.4

(%)

(1.2) (1.7)

(2)

3QFY11 Offshore

4QFY11

1QFY12

For 1QFY2012 (AprilJune 2011), Cognizant has given revenue guidance of US$1.45bn (results are not yet out), which now surpasses Wipros IT services revenue (even with a small acquisition of SAIC) and makes Cognizant the third largest Indian IT player.

July 20, 2011

Wipro | 1QFY2012 Result Update

Exhibit 5: Revenue trajectory Wipro's IT services and Cognizant

1.5 1.400 1.4
(US$ bn)

1.450 1.408

1.344 1.273 1.204 1.217 1.310

1.370

1.3 1.2 1.105 1.1 1.0 AMJ 10

JAS 10

OND 10 Cognizant Wipro

JFM 11

AMJ 11

Source: Company, Angel Research

Service wise, Wipro witnessed moderate growth across its discretionary service verticals; technology infrastructure services (contributed 21.7% to revenue), analytics and information management (contributed 6.4% to revenue), product engineering and mobility (contributed 8.3% to revenue) and consulting (contributed 3.1% to revenue) reported 0.9%, 7.6%, 1.6% and 0.2% qoq growth, respectively. Business application services (contributed 30.4% to revenue) also grew by 2.7% qoq. Other service verticals such as application development and maintenance (ADM) (contributed 23.9% to revenue), BPO (contributed 9.3% to revenue) and R&D business (contributed 12.5% to revenue) reported a decline in revenues by 2.8%, 4.2% and 3.4% qoq, respectively. 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.

Exhibit 6: 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 21.7 6.4 30.4 9.3 8.3 23.9 12.5 3.1

% growth (qoq) % growth (yoy) 0.9 7.6 2.7 (4.2) 1.6 (2.8) (3.4) 0.2 20.6 32.9 16.9 8.5 13.3 14.8 (2.5) 37.8

Industry wise, Wipros growth was led by energy and utilities (contributed 11.6% to revenue), which reported 12.0% qoq growth (CC terms). This growth in the energy and utilities segment was majorly due to acquisition of SAICs oil and gas business. Organically, growth in this segment stood muted. Revenue from manufacturing
July 20, 2011

Wipro | 1QFY2012 Result Update

and hitech stood almost flat (0.2% growth in CC terms) qoq. On the other hand, revenue of all the other industry segments declined on a sequential basis. The companys anchor segment, financial solutions (contributed 26.7% to revenue), which grew for its peers, reported a 0.2% qoq decline (CC terms) in revenue. Other segments such as healthcare, life sciences and services (contributed 10.2% to revenue), retail and transportation (contributed 15.0% to revenue) and global media and telecom (contributed 16.8% to revenue) reported 3.5%, 4.5% and 2.9% qoq decline (CC terms) in revenue, respectively. Despite having a highly diversified profile in terms of revenue from industry segments, Wipro is unable to deliver even industry average performance.

Exhibit 7: 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) (2.9) (0.2) 0.2 (3.5) (4.5) 12.0

% growth (yoy) 9.2 12.3 5.1 9.2 12.5 41.8

16.8 26.7 19.7 10.2 15.0 11.6

Geography wise also, Wipro reported a decline in revenue from all geographies, except Europe and APAC. Revenue from Japan took a major hit, declining by 25.4% qoq (CC terms), due to softness from business from Japan due to the tsunami in March 2011. Revenue from America and India and Middle East businesses also declined by 1.3% and 0.9% qoq (CC terms), respectively. Revenue from Europe and APAC increased by 1.2% and 6.6% qoq (CC terms), respectively.

Exhibit 8: 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) (1.3) 1.2 (25.4) (0.9) 6.6

% growth (yoy) 7.7 20.5 (18.2) 16.2 25.6

53.0 28.6 1.1 9.0 8.3

Segmental performance
During the quarter, the IT services segments revenue came in at US$1,408mn, up 0.5% qoq, with global IT business being the major growth driver, posting 2.3% qoq growth with revenue coming at US$1,046mn. Revenue from India and Middle East business and BPO came in at US$230.6mn and US$130.9mn, down 4.4% and 4.2% qoq, respectively.

July 20, 2011

Wipro | 1QFY2012 Result Update

Exhibit 9: IT services Revenue growth (qoq)

16 12 8
(%)

14.1 9.8 6.5 4.9 3.2 4.2 7.7 5.7 4.5 5.6 2.7 0.2 2QFY11 3QFY11 4QFY11 4.2 2.3 0.5 1QFY12 (4.2) (4.4) India and Middle East BPO IT services

4 1.0 0

2.6

1QFY11 (4) (4.3) (8) Global IT

Source: Company, Angel Research

Global IT business, which is reporting muted growth since 2HFY2011, again reported muted 1.8% qoq volume growth, even when there was slight incremental revenue traction from the acquisition of SAIC. However, due to favourable cross-currency movement, dollar revenue of the segment grew by 2.3% qoq.

Exhibit 10: Global IT services revenue trend

7 6 5
(%)

6.6 5.6 4.7 3.2 1.9 1.8 0.5 5.7 4.2

4 3 2 1 0

1.5

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

Global IT volume growth

Source: Company, Angel Research

IT services revenue growth (in USD)

The IT products segment emerged as the primary growth driver for the company by posting whopping 20.9% yoy to `1,006cr during the quarter. The consumer care and lightening segment continued its growth momentum, reporting 17.6% yoy growth in revenue to `755cr.

July 20, 2011

Wipro | 1QFY2012 Result Update

Exhibit 11: IT products Revenue growth (yoy)

1,200 1,100 1,000
(` cr)

20.9 13.4 1,069 1,006 879 832 (9.8) (13.1) 1QFY11 2QFY11 IT products 3QFY11 4QFY11 yoy growth (%) 1QFY12 911 2.3

25

15

800 700 600

(5)

(15)

Source: Company, Angel Research

Exhibit 12: Consumer care and lightening Revenue growth (yoy)

800 750 700
(` cr)

23.4 19.6 21.0 19.1 724 695 665 641 755 17.6

25 20 15 10 5 0
(%)

650 600 550 500 1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

Consumer care and lightening

Source: Company, Angel Research

yoy growth (%)

On a consolidated level, Wipros revenue came in at `8,564cr (vs. our expectation of `8,335cr), up 3.1% qoq.

Hiring and utilisation

Net additions during the quarter were decent at 4,105 employees, taking the total employee base to 1,26,490. This also includes ~1,450 employees acquired from SAIC. So, organically, net employee addition stood at ~2,655. Voluntary attritions (annualised) increased to 23.2% in 1QFY2012 from 20.9% in 4QFY2011 in global IT. However, attrition rate (quarterly) in BPO declined to 15.3% in 1QFY2012 from 15.5% in 4QFY2011.

July 20, 2011

(%)

900

Wipro | 1QFY2012 Result Update

Exhibit 13: Employee pyramid

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

1QFY11 71.3 23.0 15.9 4,854

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

Utilisation rate of the global IT business inched up by 80bp qoq to 69.7%. As per managements plans, of the total hiring to be done in FY2012, 70% would be freshers, which in turn would not give utilisation level much headroom to scale up from current levels in the next couple of quarters.

Margins decline
EBIT margin for IT services declined marginally by 10bp qoq to 22.0% due to impact of wage hikes given from June 1, 2011. However, the negative impact of the wage hike was majorly overshadowed by higher rupee realisation by the company. EBIT margin for the consumer care and lightening segment also declined marginally by 15bp qoq to 11.9%. However, EBIT margin of the IT products business, which was witnessing a downfall since the last two quarters, improved by 56bp qoq to 4.2%. On a consolidated level, EBITDA and EBIT margins declined by 37bp and 35bp qoq to 20.2% and 17.5%, respectively, due to higher growth in the IT products segment, which is a low-margin business.

Exhibit 14: EBIT margin

30 25 20
(%)

24.5 22.2 20.0 13.7 18.2 12.5 5.0 22.2 18.3 12.3 22.1 17.8 12.0 22.0 17.5 11.9 4.2

15 10 5 0

4.1

4.6

3.6

1QFY11 IT services

2QFY11 IT products

3QFY11

4QFY11

1QFY12 Consolidated

Consumer care and lightening

Source: Company, Angel Research

Going ahead, for 2QFY2012, full quarter impact of wage hikes will flow in, which will negatively affect the operating margins.

Client pyramid
Wipro added 49 new clients in 1QFY2012, few of them got acquired from SAICs acquisition. The active client base of the company stood at 937 in 1QFY2012 as against 904 in 4QFY2011.

July 20, 2011

Wipro | 1QFY2012 Result Update

Wipros client pyramid witnessed slight qualitative improvement. One client moved from the US$75mn100mn bracket to the US$100mn plus bracket. Two clients got added in the US$50mn75mn bracket. Further, 12 clients moved to the US$5mn10mn bracket from the US$3mn5mn bracket. In total, nine new clients got added in the US$1mn plus revenue brackets.

Exhibit 15: 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

1QFY11 2 7 8 41 42 65 73 196 22 858

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

Muted 2QFY2012 guidance

Revenue guidance of US$1.436bn1.464bn for 2QFY2012 for the IT services segment, with qoq growth of 24%, looks lackslustre as 2Q is seasonally the strongest quarter for IT companies and points to a subdued outlook for Wipro.

Outlook and valuation

In FY2011, Wipro added incremental revenue of only US$830mn vis--vis Infosys, TCS and Cognizant (in CY2010) adding whopping US$1.23bn, US$1.83bn and US$1.31bn, respectively. Further, the company guided for revenue growth of only 24% qoq (which includes contribution of ~US$40mn due to the acquisition of SAIC) for 2QFY2012 even on the back of disappointing 1QFY2012. Also, management maintained that it will take another 23 quarters to grow at rates comparable to its peers. This implies poor annual growth for FY2012. Thus, we expect revenue CAGR for IT services (US$ terms) to be muted at 15% (from 17.4% earlier) over FY201113E, underperforming not only tier-I companies but also tier-II IT companies such as KPIT Cummins, Persistent, 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 margins at 13.5%) and tepid volume growth, which are expected to pull down margins. Management has announced wage hikes of 1215% offshore and 34% onsite, which we expect will pull down margins by 280bp on net basis in 2QFY2012. Utilisation, the companys margin lever, is expected to be capped as the company targets to have ~70% of its gross hires as freshers. Also, it plans to continue making investments in S&M. In addition, the undergoing restructuring exercise eats up cushion, if any. Thus, we expect EBIT margin of the IT services segment to slide down to 20% in FY2012 and 19.7% in FY2012 and FY2013, respectively. Also, the ~400bp increase in effective tax rate is expected to mar the companys net profitability further, and we expect only a 10.2% CAGR in PAT over FY201113E.
July 20, 2011

Wipro | 1QFY2012 Result Update

Thus, we value the company at 16x FY2013E EPS (20% discount to Infosys) of `26.2. We downgrade the stock to Accumulate from Buy with a target price of `419.

Exhibit 16: 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 16.6 45.3 15.1 18.7 20.0 9.9

13.5 45.4 15.5 18.8 18.9 (0.4)

Exhibit 17: Change in estimates

FY2012E Parameter (` cr) Net revenue EBITDA Other income PBT Tax PAT Earlier 35,504 7,106 1,144 7,370 1,474 5,870 Revised 35,905 6,740 743 6,563 1,243 5,300 Variation 1.1 (5.1) (35.0) (11.0) (15.7) (9.7) Earlier 41,145 8,603 1,267 8,856 1,860 6,970 estimates estimates FY2013E Revised 41,339 7,741 1,356 8,060 1,612 6,428 Variation (%) 0.5 (10.0) 7.0 (9.0) (13.3) (7.8) (%) estimates estimates

Source: Company, Angel Research

Exhibit 18: One-year forward PE chart

1100 950 800 650

(`)

500 350 200 50 Apr-06 Jan-07 Price Oct-07 34x Jul-08 28x Apr-09 21x Jan-10 Oct-10 14x Jul-11 7x

Source: Company, Angel Research

July 20, 2011

10

Wipro | 1QFY2012 Result Update

Exhibit 19: Recommendation summary

Company 3iInfotech Educomp Everonn HCL Tech Infosys Infotech Enterprises KPIT Cummins Mphasis NIIT Persistent TCS Tech Mahindra Wipro Reco. Neutral Buy Accumulate Buy Buy Neutral Accumulate Buy Buy Buy Buy Accumulate Accumulate CMP (`) 46 383 549 497 2,752 139 190 429 56 360 1,132 751 399 Tgt. price (`) 522 602 591 3,200 208 499 68 424 1,368 790 419 Upside (%) 36.3 9.7 18.9 16.3 9.4 16.2 20.8 17.7 20.8 5.2 5.1 FY2013E P/BV (x) 0.6 1.3 2.6 3.2 3.9 1.1 1.8 1.6 1.4 1.4 5.7 2.1 3.0 FY2013E P/E (x) 3.9 7.4 13.0 11.8 17.2 8.6 11.3 9.7 8.2 9.3 18.2 13.3 15.2 FY2011-13E EPS CAGR (%) (4.3) 17.7 27.7 30.8 15.7 13.0 21.9 9.2 10.9 5.1 18.4 6.8 9.9 FY2013E RoCE (%) 12.0 16.4 15.5 18.9 24.7 15.0 21.8 16.8 12.4 16.6 30.2 14.9 13.8 FY2013E RoE (%) 15.1 17.0 16.7 26.9 22.7 13.2 17.7 16.8 16.6 15.4 31.3 15.6 19.8

Source: Company, Angel Research

July 20, 2011

11

Wipro | 1QFY2012 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 35,905 25,682 10,223 28.5 2,560 7.1 1,894 5.3 972 2.7 5,768 16.1 743 51 6,563 1,243 18.9 5,319 20 5,300 21.6

FY2013E 41,339 29,448 11,891 28.8 3,027 7.3 2,211 5.3 1,087 2.6 6,653 16.1 1,356 51 8,060 1,612 20.0 6,448 20 6,428 26.2

July 20, 2011

12

Wipro | 1QFY2012 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 5,346 235 120 346 169 878 793 5,093 2,111 1,671 3,042 660 262 6,488 5,482 355 5,509 299 298 924 147 898 971 6,163 1,974 2,415 4,928 496 171 6,114 6,050 500 5,537 325 400 924 225 1,200 15,161 1,018 6,492 2,857 2,361 7,521 700 200 6,154 27,303 42,464 491 3,100 23,902 100 130 (54) 27,669 80 27,749 2,025 90 225 600 350 12 3302 4,013 4,996 690 750 115 650 200 11,414 14,716 42,464 6,050 500 5,450 330 450 920 300 1,400 15,400 1,172 7,135 2,509 2,378 10,473 400 175 8,569 32,812 48,211 491 3,150 28,607 100 150 (54) 32,444 100 32,544 2,025 100 200 700 450 16 3491 4,013 5,728 700 765 100 700 170 12,176 15,667 48,211

12,875 13,913

20,118 23,231 32,993 37,144 294 2,919 314 (440) (54) 44 491 3,012 136 58 (54) 69

16,579 20,325

19,611 23,968 19,655 24,037 1,811 38 288 307 323 10 4,440 3,875 746 485 138 650 227 1,976 30 259 502 271 8 3,304 4,405 660 734 136 591 232

2776.7 3045.3

10,561 10,062 13,338 13,107 32,993 37,144

July 20, 2011

13

Wipro | 1QFY2012 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 Current liabilities 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* 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

FY2011 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 5,819 972 (20) 6,772 743 7,515 (1,243) 6,272 (1,439) 1,352 (87) 6,184 (1,000) (713) (2,618) (78) (102) 11 208 (302) (4,595) 49 124 (1,723) (1,550) 40 6,114 6,154

FY2013E 6,704 1,087 (20) 7,772 1,356 9,128 (1,612) 7,516 (142) 763 621 8,137 (1,000) (2,957) (75) (50) 4 20 189 (200) (4,069) 70 (1,723) (1,653) 2,415 6,154 8,569

July 20, 2011

14

Wipro | 1QFY2012 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* FY2010* 25.0 10.7 6.0 1.0 3.7 18.6 3.3 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 21.1 9.0 4.5 1.0 3.3 15.2 2.7 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 FY2012E FY2013E 18.4 8.8 4.1 1.5 2.9 13.5 2.4 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 18.5 8.8 3.5 1.5 2.4 12.8 2.0 21.6 45.1 6.0 113.1 0.8 6.8 0.0 0.8 1.5 19.2 13.6 25.4 19.1 0.9 64 67 15.2 7.5 3.0 1.5 2.0 10.4 1.7 26.2 53.3 6.0 132.6 0.8 7.4 0.0 0.9 1.5 19.9 13.8 28.8 19.8 0.9 60 66

July 20, 2011

15

Wipro | 1QFY2012 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%)

July 20, 2011

16