Wipro Ltd: In-Line Operating Performance During Q3 FY21-22

HOLD

CMP: Rs691  

Target Price: Rs700

* Wipro's IT services revenue grew 2.3% QoQ (3% CC) to USD2.64bn in Q3FY22, a tad below our estimates. IT services' EBITM declined 10bps QoQ to 17.6% as revenue momentum and operating efficiencies largely negated wage hikes and lower utilization.

* Wipro has guided for IT services revenue to be in the range of USD2,692-2,745mn in Q4, implying 2-4% CC QoQ growth. Management remains fairly confident of sustaining organic revenue growth momentum in coming quarters while sustaining EBITM at 17-17.5%.

* Wipro signed 11 large deals with a combined TCV of over USD600mn in Q3, while the total order intake was USD2.8bn. Management said the deal pipeline was robust and consisted of a good mix of small and large deals, providing good revenue visibility.

* We tweak our FY22E/FY23E/FY24E EPS by -0.6% to 0.2%, factoring in Q3 performance. We retain Hold with a TP of Rs700 at 25x Dec'23E EPS, considering rich valuations. 

Infosys Ltd: All-Round Beat; FY22 Revenue Growth Guidance Raised

 BUY

CMP: Rs1877 

Target Price: Rs2160

* Q3FY22 revenues beat our expectations, while the margin was in line. Revenues grew 6.3% QoQ (7% CC) to USD4.25bn. EBITM declined 10bps QoQ to 23.5% due to salary hikes and other employee interventions, negated by cost optimization.

* Infosys has raised its FY22 revenue growth guidance to 19.5-20% CC (earlier 16.5-17.5%), implying 0.5-2% QoQ growth in Q4. Infosys remains confident of sustaining growth momentum on the back of broad-based demand, solid deal intake and a healthy deal pipeline. The company has retained its EBITM guidance at 22-24%.

* The intake of large deals was healthy at USD2.5bn in Q3FY22 (43% new), with 25 large deals signed during the quarter. The deal pipeline remains healthy with a good mix of new and renewal deals, offering good revenue visibility.

* We increase earnings estimates by 1.3%/1.5%/2.5% for FY22/FY23/FY24, factoring in the Q3 beat. We maintain Buy with a revised TP of Rs2,160 (earlier Rs 2,100) at 30x Dec'23E EPS, considering strong earnings momentum and a robust demand environment.

Tata Consultancy Services Ltd: Revenue Beats Expectations, But Margins Miss

BUY

CMP: Rs3860  |

Target Price: Rs4150

* Q3FY22 revenue exceeded our expectation, while EBITM missed the estimate. Revenue grew 3.9%/15.4% QoQ/YoY in CC terms. EBITM declined by ~60bps QoQ to 25%, due to an increase in compensation costs, higher subcontracting expenses and discretionary non-manpower costs.

* Revenue growth was broad-based, and all verticals posted double-digit CC growth YoY. Growth was led by Retail & CPG (20.4% CC YoY), Manufacturing (18.3%), BFSI (17.9%), Technology & Services (17.7%) and Life Sciences & Healthcare (16.3%). All geographies, except for Asia Pacific and MEA, posted double-digit growth YoY.

*  A strong and sustained demand environment, broad-based growth, healthy deal intake (USD23.3bn in 9MFY22), and traction in cloud, IoT and Digital engineering give management confidence to sustain a robust revenue growth trajectory.

* We tweak our FY22/23/24 EPS estimates by -1.5%/0.5%/0.2% after factoring in the Q3 performance and buyback. We maintain Buy with a TP of Rs4,150 (Rs4,100 earlier) at 30x Dec'23E EPS, considering steady deal wins and consistent execution.

Skill-Lync Collaborates With Altair To Deliver New-Age Industry Relevant Courses For Engineers

* Skill-Lync & Altair Join Hands To Develop Courses, Provide Students Access To Altair Tools And Exposure To Industry Grade Projects

Delivering high-quality education to young engineers, Skill-Lync, an engineering Ed-tech start-up, announces its collaboration with Altair, a global technology company that provides software solutions in simulation, high-performance computing (HPC), and artificial intelligence (AI). With this collaboration, Skill-Lync will incorporate Altair tools and software in its curriculum to upskill aspiring engineers with the industry-sought demand of Altair tools and nurture them through specifically designed programs and projects, keeping them up to date with the industry software trends.

For Skill-Lync, this collaboration is a step forward toward an immersive learning experience for students and young engineers. Altair will offer academic licenses to all enrolled students of Skill Lync via Altair University for 12 months that can be used for academic / learning purposes, further giving students an edge.

Commenting on the collaboration, Sarangarajan V, Co-Founder of Skill-Lync, said “We are glad to work with Altair, enabling Skill-Lync students to leverage numerous tools from Altair such as HyperMesh, Inspire, AcuSolve and OptiStruct. Skill-Lync students will also be onboarded onto Altair’s Industry outreach portal to address the issue of talent mismatch in the industry. Skill-Lync and Altair are working closely to develop the course curriculum across various domains such as Concept Design, Fatigue Analysis & Manufacturing Simulation etc. We are confident that this initiative will help Skill-Lync in delivering industry-relevant courses to the students.”

Commenting on the collaboration, Vishwanath Rao, Managing Director of Altair India, said “Skill-Lync is bridging the gap between industry and academia and we are excited to be part of this journey. The technology sphere is rapidly evolving in traditional business like automotive and healthcare. Creating a talent pool to address the industry’s transforming demands is the need of the hour and together we will address this requirement in areas like generative design, AI, machine learning, digital twins, and more.”

Altair has been an industry leader in generative design for over two decades. It offers solutions that range from model-based systems design and early geometry ideation, to detailed multiphysics simulation and optimization. The software products represent a comprehensive, open-architecture solution for data analytics, simulation, and HPC.

Skill-Lync already has courses using Altair products such as HyperMesh for FEA plastic and sheet metal applications, crashworthiness analysis using HyperMesh and Radioss. With this collaboration, Skill Lync will expand its course library to include new age courses such as fatigue analysis, electric powertrain, and battery pack development.

Skill-Lync courses are designed to train students and equip them with the necessary skill sets to be industry ready. Skill-Lync envisions creating the engineer leaders of tomorrow and emphasizing project-based learning where students are trained in the various software packages and tools that are fundamental in the industry. Skill-Lync students will also be given the opportunity to access the Altair Industry Outreach portal which acts as the interface between the industry demand in connecting talent supply and demand.

Altair has been supporting various education initiatives under its Global Skill Development initiative to harness the technical education eco-system through its experience in the industrial products and services. These initiatives are intended to bridge the gap between industry requirements and technical education system by providing solutions which make technical institutes more aligned with industry needs and graduate student industry ready. 

Aditya Birla Fashion And Retail Collaborates With Germany’s GIZ To Boost Circular Economy In The Country

* The joint project will focus on material innovation, reduce inputs of harmful substances, increase textile-to-textile recycling, develop alternatives to plastic packaging, and foster traceability 

Aditya Birla Fashion and Retail Limited (ABFRL), one of India’s leading fashion companies, announced that it has collaborated with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH for implementing an India specific project to strengthen the textile and apparel industry for sustainable clothing. This unique initiative is part of the ‘develoPPP programme’ and is being implemented by ABFRL and GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).  

With this collaboration, ABFRL and GIZ aims to strengthen circular business practices for the Indian market. This will support the industry to match supply and demand which was witnessing pressure due to resource constraints.  

The joint project is designed to introduce material innovation, reduce inputs of harmful substances, increase textile-to-textile recycling, develop alternatives to plastic packaging, and foster traceability. The program will complement existing business practices such as downcycling, recycling, reusing and introducing new sustainable production processes. With the support of GIZ, ABFRL along with the Indian industry players will be able to leverage circular business practices and adopt complex processes that are technically superior and consumer friendly.  

Mr. Ashish Dikshit, Managing Director, ABFRL commented, “We are happy to partner with Germany’s GIZ to introduce globally benchmarked circular business practices in India. India’s textile and apparel industry is the 6th largest in the world and second largest employment sector. A large part of the textile waste generated is sent to the landfill and incinerated instead of being recycled or reprocessed. There is a need to ‘self-disrupt’ existing practices and transition to a more circular approach. Promoting a common understanding is therefore crucial from a sustainable development perspective for the entire textile sector in India. Along with GIZ, we aim to create awareness among key stakeholders to drive circular approaches, reduce waste, and create closed-loop systems.”  

Dr. Naresh Tyagi, Chief Sustainability Officer, ABFRL said “We look forward to collaborating with GIZ to transform the Indian Textile sector with new and robust sustainability initiatives. ABFRL is the co-chair of the Steering and Working Committee of the develoPPP project and will be responsible for setting the India agenda. It will implement select pilot projects together with global innovative solution providers.”   

Mr. Ashish Chaturvedi, Director Environment, Climate Change and Natural Resource Management GIZ India stated, “As a partner for international co-operation for sustainable development, we are committed to build a future worth living. The cooperation with ABFRL has great potential to help improving the sustainability of the Indian textile industry. In our opinion, combining the strength of  

both public and private partners is a win-win scenario, as it can create both developmental benefits for the local population and business benefits for the private companies.”  

Mr. Dieter Frick, Project Manager develoPPP, GIZ Germany said, “Solving global problems requires the commitment and cooperation of private sector, public sector and civil society partners worldwide. The BMZ's develoPPP programme is a practicable instrument to effectively achieve this. Based on common interests, ABFRL and GIZ have developed a concept and are going to pool their capacities for three years under this funding programme to find and implement circular business approaches to strengthen a sustainable Indian textile and apparel industry together with other partners in the sector.” 

With this project, ABFRL aims to build capacities in its own organization, its brands and among its suppliers, and to promote circular business practices in the Indian textile sector.  

About Aditya Birla Fashion and Retail Limited (ABFRL) 

ABFRL is part of a leading Indian conglomerate, The Aditya Birla Group. With revenue of Rs. 5,249 cr. spanning retail space of 8.4 million sq. ft. (as on March 31, 2021), it is India’s first billion-dollar pure-play fashion powerhouse with an elegant bouquet of leading fashion brands and retail formats. 

The Company has a network of 3,212 stores across approximately 31,000 multi-brand outlets with 6,800+ point of sales in department stores across India (as on 31st March 2021). 

It has a repertoire of leading brands such as Louis Philippe, Van Heusen, Allen Solly and Peter England established for over 25 years. Pantaloons is one of India’s largest fast fashion store brand. 

The Company holds exclusive online and offline rights to the India network of California-based fast fashion brand Forever 21. The International Brands portfolio includes - The Collective, India's largest multi-brand retailer of international brands, Simon Carter and select mono-brands such as American Eagle, Ralph Lauren, Hackett London, Ted Baker and Fred Perry. 

Van Heusen Innerwear, Athleisure and Active wear is establishing itself as India's most innovative and fashionable brand. The Company’s foray into branded ethnic wear business includes Jaypore and strategic partnerships with Designers ‘Shantanu & Nikhil’, ‘Tarun Tahiliani’ and ‘Sabyasachi’. 

About GIZ  

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH is a federal enterprise with worldwide operations. It supports the German Government in the field of international cooperation for sustainable development and international education. GIZ assists people and societies in shaping their own future and improving their living conditions. www.giz.de/en 

About develoPPP 

With develoPPP, the German Federal Ministry for Economic Cooperation and Development (BMZ) promotes private-sector activities where entrepreneurial opportunities and development policy potential meet. To be eligible for funding, companies must have a long-term business interest in the country and a sustainable developmental benefit for the local people. 

With develoPPP Classic, the programme offers customised funding opportunities for already established medium-sized and large enterprises. develoPPP is implemented by two experienced partners in German development cooperation: DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. 

Sterlite Power Wins “IDC Industry Innovation Award 2021” For ‘Innovation In Data Intelligence

Sterlite Power, a leading private sector power transmission infrastructure developer and solutions provider, has been recognized at the “eighth edition of the IDC Industry Innovation Awards (IDCIIA) 2021”in the “Innovation in Data Intelligence” category.   

Sterlite Power has a track record of executing complex projects successfully, with the use of technology and innovative solutions.  The company won this award for its in-house developed Geographic Information System (GIS) based Intelligent Route Mapping and Survey with TransAnalyst and CanvasR. This technology solution improves survey reliability, route generation accuracy and reduces the time for route generation. The technology solution enables data- based decisions thereby helping in reducing the overall timelines of project execution. 

IDC Industry Innovation Awards 2021 (IDCIIA 2021) is organised by International Data Corporation (IDC) and the program recognizes pioneers in the technology industry. The evaluation of nominations and selection of finalists was independently undertaken by a multidisciplinary team comprising of global IDC executive leadership, senior industry research leaders, and domain experts. 

About Sterlite Power:  

Sterlite Power is a leading power transmission infrastructure developer and solutions provider with projects covering approximately 13,700 circuit kms of transmission lines across India and Brazil. The Company has a portfolio of high-performance power conductors, EHV cables and OPGW. The company provides bespoke solutions for the upgrade, uprate and fiberzation of existing transmission infrastructure projects. It is the sponsor of IndiGrid, India’s first power sector Infrastructure Investment Trust (“InvIT”), listed on the BSE and NSE. The company was also recognised at The Economic Times Innovation Awards 2020 and is a recipient of awards from International Project Management Association (IPMA).  

78% Of Indians Feel That Insurance Is An Extremely Important Part Of Overall Financial Planning: SBI Life’s Financial Immunity Survey 2.0

After March 2020, 44% & 46% of the Indians have bought Life & Health insurance respectively for the first time

Key findings: 

* 80% of the Indians strongly feel prepared towards physical immunity out of which 74% have taken double dose of vaccination

* Top 3 worries of Indians

* 59% Rising medical/ treatment cost

* 59% Instability of jobs

* 58% Concerns around Health of self/family members

* 57% of the Indians feel ‘Financial Immunity’ is equal to ‘Being financially secure and stable’

* 3 out of 4 Indians have increased their saving/ investing since January 2021 & 50% of them plan to invest in savings/investments/insurance

* Indians remains underinsured as the life cover to personal annual income ratio is only 3.8 times, which is way below the recommended 10x to 25x of annual income

* 70% of the Indians strongly feel that life cover should keep on increasing when prominent life milestones are achieved  

SBI Life Insurance, one of the most trusted private life insurers in the country, unveiled yet another comprehensive consumer study, The Financial Immunity Survey 2.0, providing deep insights into consumer’s evolving behavior towards financial preparedness in the post covid world. SBI Life commissioned the survey with NielsenIQ (India), reaching out to 5,000 respondents across 28 key cities covering the length and breadth of India.

On the backdrop of the ongoing pandemic, a vast majority of Indians are confident that the country would tide over the situation or a possible 3rd wave. The confidence of being able to navigate through the situation is not surprising when 80% of the Indians strongly feel prepared towards physical immunity on account of taking either single or double dose of vaccination. But 38% of the Indians feel that the situation could worsen over the next three months and their top three worries attributed to (1) Rising medical/ treatment cost (2) Instability of Jobs (3) concerns around Health of family/self.

The survey findings further attempts to decode the behavior towards the top worries citied by consumers on the account of impact of income because of the pandemic where 79% of the Indians faced income reduction and 1/3rd are still facing reduced income. 64% of the Indians feel that their key life milestones like accumulating savings, leisure traveling, providing for child education were impacted.

With COVID-19 and uncertainty around, the importance of financial immunity has increased and 57% of the Indians relate it to being able to maintain ‘Financial Security and Stability of self/ family’.  78% of the Indians, feel that life insurance is extremely important in overall financial planning process. Realizing this importance of insurance, 46% purchased Health insurance and 44% purchased Life insurance for the first time during COVID-19. But although Indians feel insurance is important, they still seem to be under insured with as their insurance cover is ~3.8 times of their annual income which is not even close to recommended 10X or 25X of their annual income.

Consumers can self-assess their Financial Immunity Score by clicking on the below link:

https://www.sbilife.co.in/financialimmunity

Speaking on the survey launch, Mr. AVS Siva Rama Krishna, President, Zone II, SBI Life Insurance said, “The pandemic has impacted various aspects of our lives in multiple ways. Factors like changing risk perception and risk attitudes have led to formation of new habits amongst the consumers. Their increasing affinity towards financial planning is the result of these changing habits and behavior in the post pandemic world. SBI Life’s Financial Immunity Survey 2.0, attempts to gain a better understanding of the driving factors behind this shift and what has changed in terms of consumer behaviour towards both physical and financial immunity, especially in a post-covid world.”

He further added, “In the coming years, we are expecting to see consumers opting for insurance while doing their financial planning. It has also been observed that Indians are motivated now more than ever to build a robust financial immunity for themselves and their loved ones. This evolving consumer attitude towards financial products is a good sign and will ease the process of tackling any unprecedented situations in the future.”