WIPRO - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.6

Wipro, one of India’s tech bellwethers, continues to demonstrate financial solidity — particularly in capital efficiency and dividend stability — though growth sluggishness and valuation challenges pose headwinds for long-term upside.

💼 Core Financials Assessment

Returns & Profitability

ROE: 16.6%, ROCE: 19.5% — solid efficiency metrics for a mature IT services company

EPS: ₹12.9 — modest, but supported by healthy quarterly PAT of ₹3,330 Cr

Profit Change Qtr-on-Qtr: -6.7% — slight dip signals post-peak normalization

Debt & Liquidity

Debt-to-Equity: 0.23 — comfortably low; strong balance sheet

Dividend Yield: 2.38% — attractive income for long-term holders

📊 Valuation Metrics

Metric Value Analysis

P/E Ratio 19.6 Undervalued vs Industry PE (29.1) — reflects cautious sentiment

PEG Ratio 8.56 🚨 Very high — growth not keeping pace with valuation

P/B Ratio ~3.18 Price modestly above book value — fair for asset-light tech firms

📉 PEG red flag indicates slower earnings momentum relative to historical expectations.

🧠 Business Model & Positioning

Core Focus: Global IT services, consulting, cloud, and cybersecurity

Strengths

Diversified client portfolio across geographies

Longstanding reputation and consistent dividend policy

Tech transition toward GenAI and digital transformation opens future optionality

Concerns

Margin pressure amid competitive pricing in outsourcing

Weak quarterly growth vs peers like Infosys and TCS

Declining FII holding (-0.19%) implies cautious foreign sentiment

📉 Technical Indicators

RSI: 39.8 — approaching oversold zone; potential for short-term reversal

MACD: -1.53 — bearish crossover, momentum weakening

DMA Comparison

Price below both 50-DMA (₹260) and 200-DMA (₹265) — short-term bearish trend

🎯 Entry Strategy & Investment Outlook

Suggested Entry Zone: ₹235–₹248 — near support and oversold RSI

Target (12–15 months): ₹285–₹310 — assuming mild earnings recovery and tech sector rebound

Investor Fit

Suitable for dividend and defensive investors

Less appealing for growth-seekers due to weak PEG and slower profit momentum

Balanced portfolio anchor with low volatility exposure

I can help forecast EPS growth over FY26–28 or compare Wipro’s valuation and operating metrics with global IT peers like Accenture or Cognizant. Or we could analyze how GenAI, cloud demand, and IT budgets might shift Wipro’s long-term multiples. What would you like to explore next? 💻📈

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