Emkay Wipro Ltd.

Company
Update
Research Bracing for tough times
th
6 March 2009
Revenue headwinds stronger than peers- Lower client mining V/s peers, historical
underinvestment in account mining will come to the fore
REDUCE Wipro’s superior performance in financial services set to end
Margin defense through INR depreciation/lower headcount addition would be at
Price Target Price risk from volumes/demand risk.
Rs 207 Rs 220 Indications of lower dividend payout/ discontinuing quarterly guidance testimony
Sensex 8,198 to co’s lack of visibility.
Valuations cheap, but so are for the sector as well.
Introduce ‘REDUCE’ rating with a price target of Rs 220.
Price Performance
We introduce coverage on Wipro Technologies with a REDUCE rating and a price target
(%) 1M 3M 6M 12M
of Rs 220. Though valuations at ~9x FY10E earnings of Rs 23.1 appear undemanding,
Absolute (6) (12) (54) (51) Wipro runs the highest risk of disappointment in our view (we expect consensus
Rel. to Sensex earnings downgrades, our US GAAP FY10E earnings at Rs 23.1, are already 7%
0 (9) (19) (5)
lower than consensus). Further we believe that Wipro faces stiff growth challenges
Source: Capitaline
than other Tier 1 peers given (1) lower client mining (underinvestment in account
management, although has undertaken some remedial measures over the past
few quarters) and (2) more pressures emerging from financial services where it has
Stock Details displayed resilience over the past few quarters vis-à-vis other Tier 1 peers. Although
Sector IT Services
hiring has remained in check at Wipro in FY09 (in line with demand weakness unlike
peers Infy and TCS who have hired aggressively during the year) and should help
Reuters WIPR.BO alleviate some pressure off margins, we believe that volume/pricing pressures would still
Bloomberg WPRO@IN keep margins down. Wipro management’s indications of discontinuing the practice of
Equity Capital(Rs mn) 2928 giving quarterly revenue guidance combined with co’s plans of lowering dividend payout
Face Value(Rs)
going ahead (Rs 6/share each over the past 2 years) will dampen investor confidence
2
further. In our opinion Wipro would fare worse than other Tier 1 peers in the tough
52 Week H/L 538/182 macro environment and thus expect it to under perform sector/other Tier 1 peers.
Market Cap(Rs bn//US$ mn) 294/5,647 Revenue headwinds stiffer than other Tier 1 peers
Daily Avg Volume (No of shares) 2080626 In our opinion, Wipro faces more challenges as compared with other Tier 1 peers in a
Daily Avg Turnover (US$) 9.2 tough macro environment driven by a long duration of underinvestment in relationship
management (albeit some corrective measures have been taken in the recent past)
which would impact Wipro negatively especially in vendor consolidation exercises. To
Shareholding Pattern (%) add to Wipro’s woes we believe that the strong show in financial services space could
be halted (Wipro’s metrics have been immune to the financial services pressure
(31st Dec’08)
until Dec’08 quarter as compared with peers which started reflecting weakness
Promoters 79.3 much earlier, please refer ‘ Immune to Financial Services weakness until now’).
FII/NRI 8.5 Further we believe Wipro’s lack of visibility is explained in it’s circumspect commentary
Institutions
in the recent months with co looking to discontinue the practice of quarterly revenue
1.8
guidance as well as reducing dividend payout( ~30% over the past 2 financial years)
Private Corp. 3.1
Public
Margins defense could be limited
7.3 Wipro could not reap in the benefits of ~25% INR depreciation during FY09 on account
of large amount of hedging positions at higher US$/INR rate ( Wipro’s IT services EBIT
margins during Q3FY09 were up by ~110 bps YoY, pale as compared to Infy’s margin
expansion of ~250 bps YoY). For FY10, Wipro’s forward hedge covers would be
realized between Rs 45-48 which would perk up the average realization rate. Further
Wipro’s hiring during FY09 has remained muted which would augur well in tough
demand environment. However we are of the view that margin upsides could be limited
despite the advantage of higher realization rate and employee costs on account of
volume/pricing pressures.
Manik Taneja
manik.taneja@emkayshare.com Key Financials (Rs Mn)
+91 22 6612 1253 Net EBIT EPS ROE P/E EV/EBITDA P/BV Div. Yld
YE-Mar PAT
Sales Core % (Rs) (%) (x) (x) (x) (%)

Sweta Sinha FY2008 197,428 33,688 17.1 32,241 22.4 27.9 9.2 7.7 2.3 3.0
sweta.sinha@emkayshare.com FY2009E 252,488 40,755 16.1 34,132 23.5 24.4 8.8 6.3 2.0 1.9
+91 22 6612 1282 FY2010E 261,381 38,846 14.9 33,629 23.1 20.3 8.9 5.9 1.7 1.9
FY2011E 282,074 41,045 14.6 34,693 23.8 17.6 8.6 4.7 1.4 1.9

Emkay Research 6 March 2009 1

 Wipro Ltd. Company Update

Valuations cheap but foresee consensus downgrades

Wipro currently trades at <10x FY10E US GAAP earnings of Rs 23.1 and thus appears
cheap but so is the sector. Further we see high probability of consensus earnings cuts
across the street (our estimates lower than consensus by ~7% already and we see
downside risks here as well) coupled with weak macro news flow would keep the stock
under pressure. In our view, Wipro faces more challenges as compared to other Tier 1
offshore vendors and thus would lag peers in performance.

Key Arguments

Revenue growth more daunting than other peers

In our view, Wipro will face a more daunting task on revenue growth as compared with
other Tier 1 vendors driven by (1) exposure to R& D services (Wipro derives ~20%
revenues from TEM’s and technology companies which have been under pressure for a
while) and (2) Lower client mining (which we believe will hurt in a difficult macro
environment when clients look to consolidate tech vendors). Wipro has taken some
corrective measures over the past few quarters to address several years of
underinvestment in account management and client mining.
In early FY08, Wipro has made some changes to account management strategy by
identifying
(1) 25 Mega accounts: These client accounts have the potential to generate revenues of
US$ 100 mn+ over the next 3 years). An internal company committee headed by the
Wipro Chairman undertakes a quarterly review of these accounts. We note that since the
revamp of key client account management, Wipro has been able to double the number of
US$ 50 mn+ client accounts from 8 at the end of Q4FY07 to 16 at the end of Q3FY09.
(2) 50 GAMA accounts (Global and Major Accounts): These client accounts will have the
potential to generate revenues of US$ 50 mn+ p.a over the next 3 years. The
performance on mining these clients is reviewed by Wipro’s senior management every 6
months.
(3) Key ‘Must Have’ client accounts: Apart from identifying Mega and Gama client
accounts, Wipro has identified several ‘Must Have’ clients where the company has
instructed it’s sales teams to go aggressively on winning/deepening these client
accounts.
Apart from renewed focus on client account management, the company’s sales team is
divided into 2 categories namely (1) Hunters (who will chase new client accounts
aggressively) and (2) Farmers (sales staff who would look to increase the engagement
size within a client account). We note that Wipro has been late at adopting the above
mentioned sales strategy which has been executed very well at it’s peers Infosys and
TCS. (as evident in both the no of US$ 100 mn+/US$ 50 mn+ client accounts at 1/16
as compared with 4/20 for Infosys and 7/23 for TCS)

No. of Active Clients

1000
900
800
700
600
500
Wipro has similar number of
400
active clients as TCS… 300
200
100
0
S e p t'0 7 D e c '0 7 M a r '0 8 J u n '0 8 S e p t'0 8 D e c '0 8

In f o s y s TCS HCL Te c h W ip r o

Source: Company, Emkay Research

Emkay Research 6 March 2009 2

 Wipro Ltd. Company Update

Revenue per client (in US$ mn p.a.)

10

However revenues productivity

(revenues/client in US$ mn) is 6
the lowest, even lower than HCL
Tech which suffered from the
4
same amnesia not long back

2
Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08

Infosys TCS HCL Tech Wipro

Source: Company, Emkay Research

We believe that despite the corrective measure adopted by Wipro over the past few
quarters have led to better account management / client mining Wipro’s historical under
investment in client relationships will impact revenue growth and work against Wipro in
vendor consolidation exercises.

% of US$ 20 mn+ client accounts

12%

10%

Wipro has had a mixed success

with the revamped sales 8%
strategy. Though no of US$ 20
mn+ client accounts have 6%
doubled since March’07, Wipro
has still done much better at
new client additions only. 4%

2%
Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08

Infosys TCS HCL Tech Wipro

Source: Company, Emkay Research

Infosys TCS Wipro HCL Tech

No of Active Customers(June'07) 509 771 670 242
No of Active Customers(Dec'08) 583 965 882 315
Increase in Active clients 74 194 212 73
No of US$ 20 mn+ clients( June '07) 40 45 37 13
No of US$ 20 mn+ clients( Dec '08) 58 59 52 19
% of US$ 20 mn+ clients (June'07) 7.9% 5.8% 5.5% 5.4%
% of US$ 20 mn+ clients (Dec'08) 9.9% 6.1% 5.9% 6.0%
Source: Company, Emkay Research

Emkay Research 6 March 2009 3

 Wipro Ltd. Company Update

We note that Wipro has been relatively immune to the broader financial services
weakness (given lower exposure than peers to financial peers at ~26% of
revenues as well as helped by ramp ups in key financial services clients over the
past few quarters, refer chart below). Our conversations with company as well as
industry checks indicate that Wipro is also facing project cuts/deferrals at 2 of its
financial services clients which should stall Wipro’s superior performance from financial
verticals going ahead.

Immune to Financial Services weakness until now

20%

15%

Mark that Wipro continued to 10%

post sequential growth in
revenues from Financial
Services until Dec’08 quarter as 5%
compared with peers who
started reflecting weakness in 0%
financial services early. Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08
-5%

-10%

Infosys TCS HCL Tech Wipro

Source: Company, Emkay Research

Margin defense could be limited

Wipro has been unable to reap in benefits of ~25%+ currency depreciation in FY09 on
account of the company’s aggressive forex hedge positions which limited the average
realization rate for the company (to highlight Wipro’s average realized rate during 9M
FY09 at Rs 43.3/$ V/s Infy’s at Rs 45.3/$) and thus limited any upsides to margins in a
favorable currency environment. For FY10, we estimate that the average realized rate
on forex hedges would be ~Rs 44/$ and with co indicating that ~15% of revenues every
quarter would get booked at hedged rate , the average realized rate will improve to
Rs 46/$ + (our spot rate currency assumptions at Rs 47/$ for FY10)
Average realization rates during 9MFY09
Wipro Infosys TCS
US$ revenues 3277.4 3542 4582
Revenues(INR terms) 141911 160580 206411
Avg US$/INR realisation 43.3 45.3 45.05
Source: Emkay Research

Emkay Research 6 March 2009 4

 Wipro Ltd. Company Update

Wipro unable to reap in benefits of currency depreciation during FY09

35

30
Wipro’s EBIT margins have
remained flat unlike Infy and 25
TCS which have gained the
benefit of currency depreciation.
20

15

10
Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08

Infosys TCS HCL Tech Wipro

Source: Emkay Research

Wipro management remains committed on maintaining/increasing margins during FY10.

In our view, Wipro’s confidence could be stemming from (1) higher average realized rate
for FY10, (2) more tighter cost controls ahead of the peers and (3) trying to increase
proportion of fixed price engagements. Wipro management categorically pointed out that
it was gearing itself for flat revenues during FY10 and thus looking to pull us its purse
strings. We note that Wipro’s hiring has been muted during FY09YTD with Wipro adding
a mere 1,400 people/1.4% of FY08 employee base unlike other peers like Infy and TCS
who have added ~12k/15k employees each over the same period as they honored FY09
campus commitments as well as well as there have been no onsite wage increments this
year which should act as margin buffers.

Fixed price proportion of Revenues (%)

40

35
Wipro has laid focus on
increasing fixed proportion of
contracts over the past few
30
quarters.

25

20
Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08

Source: Emkay Research

Further, Wipro, like most other peers, could cut variable pay (most Tier 1 players
pointing to taking such a step if needed, Wipro’s variable salary at ~12% of overall
salary costs). However we believe that volume/pricing pressures as well as OCI losses
of ~Rs 15 bn sitting in the Balance Sheet would limit any notable margin expansion
even with the benefit of depreciating currency.

Emkay Research 6 March 2009 5

 Wipro Ltd. Company Update

Plans to discontinue quarterly guidance-Lack of visibility

After the Q3FY09 results, Wipro management’s comments have turned increasingly
negative driven by acceptance of the macro business challenges. We note that Wipro
has already guided for ~7% cut in organic revenues for Q4FY09 as compared to more
modest expectations in revenue declines for the other Tier 1 vendors. We note that
Wipro’s Q4 revenue guidance of US$ 1045 mn (including ~US$ 20 mn/quarter from the
recently acquired CITOS) would also stack a difficult YoY organic revenue growth in
case of Wipro as compared with peers. (refer calculation below).
Wipro’s March’09 revenue
Dec'08 March'09 QoQ FY10/CY09 YoY
guidance implies the highest Co Name revenues guidance gwth(%) annualized gwth
decline in organic revenues (on
annualized basis) for FY10 as Infosys 1171 1170 -0.1% 4680 -0.7%
compared with peers Wipro 1100 1045 -6.8% 4100 -4.7%
Cognizant 753 735 -2.4% 2940 4.4%
Source: Company, Emkay Research

Further Wipro management’s recent indications on

(1) Plans to discontinue quarterly revenue guidance (co attributes it to uncertainty on
volumes and cross currency exchange rate movements) in our view is a admittance of
the tough demand environment and limited visibility for the sector/peers and
(2) Reducing dividend payout ratio (dividend payout has been ~30% over the last 2
financial years) in order to beef up cash reserves for uncertain times and for opportune
M&A opportunities in our view would dampen investor confidence and lead to investors
questioning ‘predictability’ at Wipro as compared with other Tier 1 peers.

Financials
We estimate Wipro to report revenues of US$ 4207 mn (-2.7% YoY) and US$ 4569 mn
(+8.6% YoY) in FY10 and FY11 respectively. Although we build in pick up in revenue
growth for WIpro in FY11 as well like other sector peers, we believe Wipro would lag
sector in demand pickup. We expect revenue, EBIT and net profit CAGR of 5.7%,
0.5% and 0.8% over FY09E-11E. Key risks to our estimates emanate from US$/INR
appreciation (we build in avg realization rates of Rs 46.55 and Rs 45.7 for FY10/FY11,
spot rate assumptions of Rs 48/$ and Rs 47/$ for FY10/FY11), further protectionist
measures from the Western economies (like the ones we have seen in the recent past)
and increase in Tax holidays under Section 10A/10b of the Income Tax Act’1961 to
FY11. (currently we build in tax rates of 19% for FY11 as we factor expiry of tax
benefits in March’10)

Valuations cheap; but challenges stiffer than peers

Wipro is currently trading at historically low multiples of ~9x FY10E earnings of Rs 23.1
but so is the sector trading at historical lows. Further we see high probability of earnings
downgrade across the street (our FY10/FY11 USGAAP estimated earnings of Rs
23.1 and Rs 23.8 are already lower than consensus estimates by ~7%). We see
Wipro underperforming sector peers in a potential demand recovery as well. We
introduce ‘REDUCE’ rating with a price target of Rs 220.

FY10E FY11E
Our FY10/FY11 earnings
In Rs Mn Consensus Emkay % difference Consensus Emkay % difference
estimates are already lower than
street by ~7%. Sales 275017.6 261380.6 -5.0% 304459.0 282074.2 -7.4%
EBIT 42958.7 38845.7 -9.6% 47473.8 41045.0 -13.5%
Net Profits 37692.7 33628.8 -10.8% 39495.7 34693.0 -12.2%
EPS (Rs) 24.8 23.1 -6.8% 25.7 23.8 -7.3%

Source: Emkay Research

Emkay Research 6 March 2009 6

 Wipro Ltd. Company Update

Peer Valuations
Company
Name M Cap EPS Rs EPS Growth PER, X EV/EBITDA, X ROE, %
FY09-11E
Rating CMP TP (Rs bn) FY08 FY09 FY10E FY11E CAGR FY08 FY09 FY10E FY11E FY08 FY09 FY10E FY11E FY08 FY09 FY10E FY11E
451 51.3 54.0 55.1 57.8 3.5% 9.7 9.2 9.1 8.6 14.2 11.4 11.1 9.6 45.9 37.1 32.6 29.6
TCS HOLD 461 590
119 133
689 81.3 102.2 99.0 108.0 2.8% 14.7 11.7 12.1 11.1 11.7 8.4 8.1 6.7 37.2 37.4 29.3 26.6
Infosys HOLD 8 0
301 22.4 23.5 23.1 23.8 0.8% 9.2 8.8 8.9 8.6 7.7 6.3 5.9 4.7 27.9 24.4 20.3 17.6
Wipro REDUCE 207 220

Mphasis Ltd BUY 170 240 36 12.2 14.1 29.8 27.9 40.8% 13.9 12.0 5.7 6.0 8.3 9.0 3.8 3.1 23.6 22.8 36.2 25.7
Tech
33 58.8 69.8 58.6 62.0 -5.7% 3.9 3.3 3.9 3.7 3.7 2.6 3.1 2.8 45.9 37.1 32.6 29.6
Mahindra BUY 250 303

HCL Tech HOLD 95 139 64 15.1 18.3 17.4 16.1 -6.2% 6.3 5.2 5.5 5.9 2.5 4.0 4.2 4.2 20.2 24.7 21.5 17.2

Price / Equity Price / Book Value

900 (Rs) 1200 (Rs)

1000 8x

600 24x 800

6x
600
18x
v2x 4x
300 12x 400
2x
6x 200

0 0
Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08

Source: Emkay Research

Enterprise Value / EBITDA Enterprise Value / Sales

1600000 (Rs mn) 2100000 (Rs mn)

1800000 7x
1200000 24x
1500000

1200000 5x
800000 18x

900000
12x 3x
400000 600000
6x
300000 1x
0
Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 0
Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08

Source: Emkay Research

Emkay Research 6 March 2009 7

 Wipro Ltd. Company Update

Financials
Income Statement Balance Sheet
Y/E, Mar (Rs. m) FY08 FY09E FY10E FY11E Y/E, Mar (Rs. m) FY08 FY09E FY10E FY11E
Net Sales 197,428 252,488 261,381 282,074 Equity share capital 29,364 30,968 30,968 30,968
Growth (%) 28 4 8 Reserves & surplus 99,990 118,764 149,437 181,945
Total Expenditure (157,781) (203,448) (212,888) (230,518) Minority Interest 114 192 192 192
Growth (%) 29 5 8 Networth 129,468 149,924 180,597 213,105
EBIDTA 39,647 49,040 48,493 51,556 Secured Loans 43,732 46,315 46,315 46,315
Growth (%) 24 (1) 6 Unsecured Loans - - - -
EBIDTA % 20.1 19.4 18.6 18.3 Loan Funds 43,732 46,315 46,315 46,315
Other Income 2,450 (1,202) 1,260 1,860 Deferred Tax Liability 2,098 800 800 800
Depreciation (5,959) (8,285) (9,647) (10,511) Total Liabilities 175,298 197,039 227,712 260,220
EBIT 33,688 40,755 38,846 41,045 Goodwill 51,423 63,701 63,701 63,701
Interest - - - - Gross Block 47,837 63,837 73,837 83,837
EBT 36,138 39,553 40,106 42,905 Less: Depreciation (21,559) (28,310) (36,157) (44,869)
Tax (3,873) (5,356) (6,417) (8,152) Net block 26,278 35,527 37,680 38,968
EAT 32,265 34,197 33,689 34,753 Capital WIP 13,544 13,544 13,544 13,544
Growth (%) 6 (1) 3 Investment 16,506 22,206 22,206 22,206
EAT (%) 16.3 13.5 12.9 12.3 Current Assets 115,961 141,661 176,588 210,804
Minority Interest (24) (65) (60) (60) Inventories 7,172 9,684 10,742 12,365
Net Profit after MI 32,241 34,132 33,629 34,693 Sundry debtors 47,213 60,874 66,598 74,189
Cash & bank balance 39,270 37,899 59,862 77,881
Loans & advances 3,214 5,534 7,161 9,274
Other current assets 19,092 27,670 32,225 37,095
Current Liab & Prov 49,204 80,243 86,649 89,645
Current liabilities 46,193 76,092 82,353 85,009
Provisions 3,011 4,150 4,297 4,637
Net current assets 66,757 61,418 89,939 121,158
Misc exps - - - -
Deferred Tax 790 642 642 642
Total Assets 175,298 197,039 227,712 260,220

Cash Flow FY08 FY09E FY10E FY11E Key ratios FY08 FY09E FY10E FY11E
Net Profit after Tax 32,241 34,132 33,629 34,693 EPS (Rs) 22.4 23.5 23.1 23.8
Add : Depreciation 5,959 8,285 9,647 10,511 CEPS (Rs) 26.6 29.1 29.7 31.1
Add : Misc exp w/off Book Value Per Share (Rs) 90.1 103.0 124.1 146.4
Net changes in WC (37,418) 5,339 (28,520) (31,219) Dividend Per Share (Rs) 6.1 4.0 4.0 4.0
Operational Cash Flows 47,612 42,959 36,779 32,064 Valuations Ratios (x)
Capital expenditure (55,294) (29,812) (11,800) (11,800) PER 9.2 8.8 8.9 8.6
Investments - - - - P/CEPS 7.7 7.1 6.9 6.6
Investing Cash Flows (55,294) (29,812) (11,800) (11,800) P/BV 2.3 2.0 1.7 1.4
Borrowings 14,064 4,923 - - EV/EBIDTA 7.7 6.3 5.9 4.7
dividend paid (10,254) (6,807) (6,807) (6,807) EV/Sales 1.5 1.2 1.1 0.9
Issue of shares 768 (6,948) 3,851 4,621 M-Cap/sales 1.5 1.2 1.1 1.1
Share Premium - - - -
Financing Cash Flows 4,668 (14,961) (3,476) (2,705) Profitability Ratios (%)
changes in cash (3,014) (1,813) 21,503 17,559 RoCE 27.0 25.7 20.9 18.9
Opening balance 19,650 39,270 37,899 59,862 RoNW 27.9 24.4 20.3 17.6
Closing balance 39,270 37,899 59,862 77,881 EBITDA Margin 20.1 19.4 18.6 18.3
EBIT Margins 17.1 16.1 14.9 14.6
Net Profit Margin 16.3 13.5 12.9 12.3
Source: Emkay Research

Emkay Research 6 March 2009 8

 Wipro Ltd. Company Update

Appendix

Revenues ( Added QoQ in US$ Mn) Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08
Infosys 94.0 62.0 58.0 12.9 61.1 -44.6
TCS 138 87 14 8 49 -91
HCL Tech 33.2 32.0 24.1 18.9 0.8 6.8
Wipro 78.6 121.4 52.4 36 42.4 -9.8
Cognizant 42.3 41.1 43.2 42.3 49.3 18.3

Revenue growth (QoQ %) Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08

Infosys 10.1% 6.1% 5.4% 1.1% 5.3% -3.7%
TCS 10.8% 6.2% 0.9% 0.5% 3.2% -5.8%
HCL Tech 8.4% 7.5% 5.2% 3.9% 0.2% 1.3%
Wipro 10.4% 20.1% 5.4% 3.5% 4.0% -0.9%
Cognizant 8.2% 7.4% 7.2% 6.6% 7.2% 2.5%

Revenue growth (YoY %) Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08

Infosys 37.1% 32.1% 32.3% 24.5% 19.0% 8.1%
TCS 45.1% 36.8% 28.1% 19.3% 11.2% -1.3%
HCL Tech 42.7% 39.2% 33.9% 27.3% 17.7% 11.0%
Wipro 38.9% 50.4% 47.3% 44.6% 36.2% 12.3%
Cognizant 48.0% 41.4% 39.7% 32.7% 31.5% 25.5%

Revenues from BFSI Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08

Infosys, % 36.5% 36.8% 33.9% 34.5% 33.40% 34.90%
Infosys( in US$ mn) 373.0 398.9 387.1 398.4 406.1 408.8
QoQ growth, % 11.3% 6.9% -3.0% 2.9% 1.9% 0.7%

TCS, % 43.3% 44.0% 43.8% 42.5% 41.9% 41.9%

TCS ( in US$ mn) 554.1 597.6 603.8 591.9 607.9 579.4
QoQ growth, % 11% 8% 1.0% -2.0% 2.7% -4.7%

HCL Tech, % 28.7% 29.2% 28.4% 27.3% 27.5% 27.5%

HCL Tech ( in US$ mn) 123.1 134.6 137.7 137.6 138.8 140.7
QoQ growth, % 8% 9% 2.3% -0.1% 0.9% 1.3%

Wipro, % 24.1% 24.3% 24.9% 25.4% 26.3% 26.0%

Wipro ( in US$ mn) 206.7 237.9 256.8 271.1 291.9 286.0
QoQ growth, % 12% 15% 8.0% 5.6% 7.7% -2.0%

Cognizant, % 47.0% 47.0% 45.5% 45.8% 46.1% 44.9%

Cognizant ( in US$ mn) 262.7 282.0 292.6 313.9 338.7 338.1
QoQ growth, % 8.2% 7.4% 3.8% 7.3% 7.9% -0.2%

Emkay Research 6 March 2009 9

 Wipro Ltd. Company Update

Revenues from Manufacturing Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08

Infosys, % 13.9% 14.6% 16.4% 18.4% 20.1% 19.6%
Infosys( in US$ mn) 142.1 158.3 187.3 212.5 244.4 229.6
QoQ growth, % 12.6% 11.4% 18.3% 13.5% 15.0% -6.1%

TCS, % 12.7% 12.5% 9.8% 10.7% 11.0% 10.6%

TCS ( in US$ mn) 162.5 169.8 135.1 149.0 159.6 146.6
QoQ growth, % 40.9% 4.5% -20.4% 10.3% 7.1% -8.2%

HCL Tech, % 30.0% 28.5% 29.5% 30.7% 30.7% 30.5%

HCL Tech ( in US$ mn) 128.7 131.4 143.1 154.7 154.9 156.0
QoQ growth, % 13.3% 2.1% 8.9% 8.1% 0.2% 0.7%

Wipro, %* 17.7% 18.8% 19.6% 19.0% 19.4% 19.4%

Wipro ( in US$ mn) 151.8 184.1 202.2 202.8 215.3 213.4
QoQ growth, % 10.7% 21.2% 9.8% 0.3% 6.2% -0.9%

Cognizant, %** 15.0% 15.0% 15.0% 15.6% 15.7% 16.4%

Cognizant ( in US$ mn) 83.8 90.0 96.5 106.9 115.3 123.5
QoQ growth, % 8.2% 7.4% 7.2% 10.8% 7.9% 7.1%
*Wipro includes Manufacturing and Healthcare Revenues
**Cognizant includes Retail, Manufacturing and Logistics revenues

Revenues from Telecom Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08

Infosys, % 20.6% 21.1% 22.5% 19.7% 19.0% 16.7%
Infosys( in US$ mn) 210.5 228.7 257.0 227.5 231.0 195.6
QoQ growth, % 3.1% 8.6% 12.3% -11.5% 1.5% -15.3%

TCS, % 17.8% 17.5% 15.8% 15.5% 15.3% 13.8%

TCS ( in US$ mn) 227.8 237.7 217.8 215.9 222.0 190.8
QoQ growth, % 18.9% 4.3% -8.4% -0.9% 2.8% -14.0%

HCL Tech, % 16.3% 16.1% 16.4% 16.0% 16.5% 15.7%

HCL Tech ( in US$ mn) 69.9 74.2 79.5 80.6 83.3 80.3
QoQ growth, % 2.7% 6.1% 7.2% 1.4% 3.3% -3.6%

Wipro, % 20.2% 19.4% 19.2% 19.1% 18.0% 17.9%

Wipro ( in US$ mn) 173.3 189.9 198.0 203.9 199.8 196.9
QoQ growth, % 8.5% 9.6% 4.3% 3.0% -2.0% -1.4%

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 Wipro Ltd. Company Update

Revenues from North America Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08
Infosys, % 62.6% 62.3% 60.7% 62.6% 61.5% 64.5%
Infosys( in US$ mn) 639.8 675.3 693.2 723.0 747.8 755.6
QoQ growth, % 10.1% 5.6% 2.6% 4.3% 3.4% 1.0%

TCS, % 52.2% 49.5% 50.4% 51.1% 49.7% 52.2%

TCS ( in US$ mn) 738.9 744.0 764.6 779.3 782.3 774.1
QoQ growth, % 12.7% 0.7% 2.8% 1.9% 0.4% -1.0%

HCL Tech, %
HCL Tech ( in US$ mn) 232.5 253.5 271.1 289.2 289.2 305.9
QoQ growth, % 8.4% 9.0% 7.0% 6.7% 0.0% 5.8%

Wipro, % 54.2% 55.0% 55.9% 57.4% 57.3% 59.8%

Wipro ( in US$ mn) 499.2 589.4 612.7 638.4 659.3 660.1
QoQ growth, % 6.1% 18.1% 4.0% 4.2% 3.3% 0.1%

Cognizant, % 58.2% 60.2% 59.4% 59.8% 59.4% 60.0%

Cognizant (in US$ mn) 458.2 484.2 513.9 536.3 577.1 601.1
QoQ growth, % 5.3% 5.7% 6.1% 4.4% 7.6% 4.2%

Revenues from Europe Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08

Infosys, % 27.4% 28.6% 29.3% 27.3% 28.1% 25.5%
Infosys (in US$ mn) 280.0 310.0 334.6 315.3 341.7 298.7
QoQ growth, % 12.6% 10.7% 7.9% -5.8% 8.4% -12.6%

TCS, % 8.4% 9.8% 9.7% 10.1% 10.5% 10.7%

TCS (in US$ mn) 400.6 438.9 441.4 451.4 483.2 433.0
QoQ growth, % 7.0% 9.6% 0.6% 2.3% 7.0% -10.4%

HCL Tech, % 30.8% 29.7% 29.6% 29.1% 28.7% 27.1%

HCL Tech (in US$ mn) 132.1 136.9 143.6 146.6 144.8 138.6
QoQ growth, % 9.5% 3.6% 4.9% 2.1% -1.2% -4.3%

Wipro, % 29.0% 27.0% 27.1% 26.9% 26.9% 26.1%

Wipro (in US$ mn) 248.7 264.4 279.5 287.2 298.6 287.1
QoQ growth, % 13.2% 6.3% 5.7% 2.7% 4.0% -3.8%

Cognizant, % 16.9% 18.0% 18.8% 20.3% 19.7% 18.1%

Cognizant (in US$ mn) 94.2 108.2 121.2 139.0 145.0 136.0
QoQ growth, % 24.3% 14.8% 12.0% 14.7% 4.4% -6.3%

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 Wipro Ltd. Company Update

Attrition (LTM 12 mths) Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08

Infosys 14.2% 13.7% 13.4% 13.6% 12.4% 11.8%
TCS 11.5% 12.2% 12.6% 12.8% 13.2% 11.9%
HCL Tech 14.2% 12.3% 12.0% 12.3% 16.0% 12.7%
Wipro 16.9% 16.4% 15.9% 15.2% 13.5% 13.9%
Cognizant 17.0% 12.4% 12.4% 15.0% 17.6% 11.5%

No of Active clients Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08

Infosys 520 530 538 567 586 583
TCS 814 857 904 885 920 965
HCL Tech 244 256 269 279 295 315
Wipro 720 915 927 928 906 882

Utilisation (ex trainees) Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 Dec'08

Infosys 78.4% 76.3% 74.5% 70.9% 72.8% 73.4%
TCS 78.9% 77.7% 79.1% 78.3% 81.1% 79.9%
HCL Tech 77.2% 75.5% 74.4% 74.1% 74.7% 75.0%
Wipro 79.0% 78.2% 78.1% 78.3% 79.3% 79.4%
Cognizant 58.0% 56.0% 53.0% 55.0% 61.0% 64.0%

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 Wipro Ltd. Company Update

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Emkay Research 6 March 2009 13