Reduce Wipro: IIFL

IIFL has recommended a reduce rating on Wipro in its December 24, 2008 research report. "Wipro has announced acquisition of Citigroup’s captive technology infrastructure

and application services arm, Citi Technology Services (Citos), for a consideration of USD 127 million. As a part of the deal, it has also entered into a Master Services Agreement (MSA) with Citi for a TCV of at least USD 500 million over a period of 6 years."

"Based on CY2008 metrics, Wipro has acquired Citos for a very low 3.3x EV/EBITDA or 3.8x PER. However, given the scant information provided by management regarding Citos, any impact of one-off items during CY08 could not be ascertained. Reduce," says IIFL's research report.