Wipro initiated with "neutral weight"

07/11/06 - Prudential Financial

NEW YORK, July 11 (newratings.com) - Analyst Bryan C Keane of Prudential Financial initiates coverage of Wipro Limited (WIT) with a "neutral weight" rating. The target price is set to $14.

In a research note published yesterday, the analyst mentions that Wipro’s sustained success in entry into more services is expected to keep the company’s revenue growth healthy over the forthcoming years. Wipro has made six acquisitions since December 2005, which are estimated to add $17 million to revenues in F1Q07, the analyst says. Prudential Financial expresses its concern, however, regarding the company’s recent aggressive approach to acquisitions in view of integration risks and resulting margin contraction.