CLSA downgrades Wipro

MUMBAI: Credit Lyonnais Securities Asia (CLSA) India has downgraded India's
Wipro Ltd to a ‘sell’, while maintaining its ‘buy’ on Infosys
Technologies and HCL Technologies. In a research report dated March 9, CLSA said
it expects pressure on business from three of Wipro's top 10 clients, which
collectively accounted for 17 per cent of third quarter revenues in the year
ending March 2001.

"We are downgrading our recommendation on Wipro to a ‘sell’ with a
target price of Rs 1,530 based on its high valuations," the report said.
The stock was down 12.71 per cent at Rs 1,689 on Monday afternoon, while the
Bombay benchmark index was down 2.94 per cent.

It said the company faced relatively higher risk to growth because of its
high exposure to the telecom sector. "Wipro's high valuations relative to
the sector continue to concern us," said Aniruddha Dange and Dhruv Vohra in
a research report.

The report also recommends investors to stay away from second-tier companies
where the risk to earnings is higher. It said Infosys and HCL Technologies had
come off recently and offered attractive valuations. "Given the robust
business models of these companies and our estimate on earnings growth, we
believe that a positive re-rating for these stocks is imminent," it said.
Infosys was down 6.23 per cent at Rs 4,517.15 and HCL Technologies was off 7.32
per cent at 402 on Monday afternoon.

(C) Reuters Limited 2001.