Upgrade Sparks Wipro

A Goldman Sachs analyst sees a sustainable valuation level.

Author:: Katie Dean
Publish date:: Jun 2, 2006 2:38 PM EDT

Wipro

shares rose Friday after an analyst upgrade and a positive performance by its counterparts in the Indian IT services sector overseas.

Stock in the Indian IT services firm was recently trading at $12.41, up 50 cents, or 4.2%.

"Following a 20% quarter-to-quarter decline (vs. a 5% decline for the

Nasdaq

) we are upgrading the ADR shares of WIT, given a more balanced risk-reward profile,"Goldman Sachs analyst Julio Quinteros wrote in a Friday client note. "Although we see limited multiple expansion from current levels, we believe that the current valuation appears more sustainable."

Quinteros noted that "continued positive momentum and demand environment should support the shares, although we still see little in the way of multiple expansion. Earnings growth will remain the key for share performance."

Quinteros raised his rating on Wipro to in-line/attractive from underperform/attractive.

Cognizant Technologies

(CTSH) - Get Report

is his top choice in the space, at outperform/attractive.

Goldman Sachs does and seeks to do business with the companies it covers.

After

several weeks of volatility, the Bombay Stock Exchange's Sensex closed up 3.8% on Friday.