Mehabe score: 4 G Factor: 3 Piotski Score: 6 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 6.
Description
Wipro Limited is a global information technology, consulting, and business process services company headquartered in Bangalore, Karnataka. They use cognitive computing, hyper-automation (using artificial intelligence (AI), machine learning (ML)), robotics, cloud, analytics and emerging technologies to help their clients adapt to the digital world. It caters to customers across six continents. #Site:WIPROMain Symbol:WIPRO
Stock trades at 576.0, above its 50dma 525.68. It also trades above its 200dma 439.05. The stock remains bullish on techicals
The 52 week high is at 564.00 and the 52week low is at 233.80
Price Chart
P/E Chart
Sales and Margin
Strengths
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Weakness
– The company has delivered a poor sales growth of 3.86% over past five years.
Competition
– The industry trades at a mean P/E of 31.4x. L & T Infotech trades at the industry’s max P/E of 39.85x. WIPRO trades at a P/E of 27.1x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 8.0. WIPRO has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 5.1%. The max 1- month return was given by Mindtree: a return of 10.62 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 18467.0 cr compared to Rs 14923.0 cr for period ended Jun 2020, a rise of 23.7%
Operating Profits reported at Rs 4195.0 cr for period ended Jun 2021 vis-vis 3189.0 for period ended Jun 2020 .
Operating Margins expanded 134.6 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 5.92 compared to Rs 5.42 for previous quarter ended Mar 2021 and Rs 4.18 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 65480.0 cr for period ended TTM vis-vis sales of Rs 61935.0 cr for the period ended Mar 2021, a growth of 5.4%. The 3 year sales cagr stood at 3.5%.
Net Profit reported at Rs 11649.0 cr for period ended TTM vis-vis sales of Rs 10796.0 cr for the period ended Mar 2021, rising 7.3%.
Company recorded a Net Profit CAGR of 9.0% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 14755.0 cr for period ended Mar 2021 vis-vis Rs 10064.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 20.0% compared to 18.0% over the last 3 Years. – The stock has given a return of 119% on a 1 Year basis vis-vis a return of 39% over the last 3 Years. – The compounded sales growth on a TTM bassis is 7% vis-vis a compounded sales growth of 4% over the last 3 Years. – The compounded profit growth on a TTM basis is 20% vis-vis a compounded profit growth of 11% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 9.21% vis-vis 8.46% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 11.25% vis-vis 11.09% for Dec 2020
Conclusion
– – The company has delivered a poor sales growth of 3.86% over past five years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 525.68 and is trading at 576.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
