Edelweiss Research has come out with pre earnings report on Wipro. It has recommended accumulate rating on the stock.

Expected numbers

Edelweiss expects Wipro to close Q4FY07 with total revenues of INR 41.5 billion, a Q-o-Q growth of 4.8%, and Global IT business to clock revenues of INR 30.2 billion, up 4.5% Q-o-Q. Our net profit estimate stands at INR 7.7 billion, up 3.7% Q-o-Q.

Edelweiss report on Wipro

Wipro Infotech spreading wings in Middle East markets

Dubai World, Dubai Islamic Bank (DIB), and Wipro Infotech entered into an agreement to establish a strategic IT services partnership in Dubai. Wipro Infotech, with this strategic initiative, aims to capture the fast-growing requirements in technology solutions and infrastructure from this economy.

Wipro Infotech formed a JV in Saudi Arabia with DAR AI Riyadh, a local diversified group having presence in the engineering and IT services. Wipro Infotech will hold 66% in the JV named Wipro Arabia Ltd. We remain positive on Wipro’s strategy of penetrating the Middle East market and expect developments to yield results going forward. Wipro’s customers in Saudi Arabia include Saudi Telecom, SABIC, Arab National Bank among others.

Launch of Integrated Publishing Platform (IPP)

Wipro, during the current quarter, launched a solution (IPP) catering to the media, publishing & information aimed at reducing ‘time-to-publish’ across creation, management and distribution functions in organizations. In a publishing organization, there are a host of products used across various functions of content life cycle. This solution provides an integration platform between discrete systems.

BPO’s strong growth to continue

We expect Wipro’s BPO to continue to grow in high single digits, at USD 57.8 million for the quarter. The BPO business has undergone transformation and client rationalization prior to the previous two quarters, the results of which are seen.

Valuations

At CMP of INR 518, the stock trades at P/E of 20.5x and 16.7x and EV/EBITDA of 14.9x and 11.2x for its FY08E and FY09E earnings, respectively. We maintain accumulate recommendation.

Above is the briefs of the full report download link