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IDBI Capital Report
Wipro Ltd. has announced its biggest acquisition till date.
It has announced acquisition of Capco – a global management and technology consulting company focused on the banking financial services and insurance vertical.
The company would pay $1.45 billion in cash at an implied CY20 revenue multiple of ~2 times. The acquisition is expected to be completed in Q1 FY22.
While the acquisition increases our FY22/23 IT services revenue forecast by 6.3%/8.2%, it would weigh on Ebit margin and thus on consolidated earnings per share.
We believe that Capco’s acquisition is a bold move by Wipro, it would have meaningful impact on profitability amid company’s target to accelerate organic growth.
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