Emkay retains ‘Reduce’ rating on Wipro

MUMBAI: Emkay Global Financial Services has retained ‘Reduce’ rating on Wipro after the company missed street expectations for the quarter ended September. However, the brokerage has maintained its price target of Rs 420 on the stock.

“We tweak our earnings model for marginally higher US$ revenue estimates (note that we build in ~19%/18.4% YoY revenue growth for FY11/12 V/s 28%/23% for Infosys and 29%/21% for TCS) and reset currency assumptions resulting in marginal 2%/1% cut in our earnings estimates to Rs 21.1 and Rs 23.1 for FY11E/FY12E.

Wipro’s recent underperformance V/s peers appears justified in the back drop of financial performance trailing peers. Retain REDUCE with an unchanged target price of Rs 420,” the report said.