WIPRO - Investment Analysis: Buy Signal or Bull Trap?

Last Updated Time : 19 Sept 25, 2:16 pm

Investment Rating: 4.1

📊 Fundamental Analysis

Valuation

P/E Ratio: 22.2 vs Industry PE of 30.0 — undervalued relative to peers, offering a margin of safety.

PEG Ratio: -5.55 — negative PEG suggests earnings contraction or volatility, a cautionary signal.

Price to Book: ~4.28 — reasonable for a mature IT services company.

Profitability

ROCE: 23.0% and ROE: 17.8% — strong metrics, indicating efficient capital deployment and solid shareholder returns.

EPS: ₹11.6 — healthy earnings base.

Quarterly PAT Growth: +53.7% — impressive momentum, supports near-term optimism.

Dividend Yield: 2.34% — attractive for income-focused investors.

Debt to Equity: 0.12 — low leverage, excellent for long-term stability.

📈 Technical & Trend Indicators

DMA 50 / DMA 200: ₹252 / ₹260 — current price is near both, indicating consolidation.

RSI: 59.5 — neutral to slightly bullish.

MACD: 1.14 — mildly bullish crossover.

Volume: Above average — confirms active market interest.

52W Index: Trading at ~32% of its 52-week high — deep correction, potential value zone forming.

💡 Ideal Entry Price Zone

Entry Zone: ₹240–₹250**

This range aligns with technical support and offers better valuation comfort.

Avoid entering above ₹265 unless earnings growth stabilizes and PEG improves.

🧭 Exit Strategy & Holding Period

If you already hold WIPRO

Holding Period: 5+ years — ideal for compounding returns from digital transformation and global IT demand.

Exit Strategy

Fundamental Trigger: Exit if ROE drops below 14% or PEG remains negative for 2+ quarters.

Technical Trigger: Consider trimming if price nears ₹320–₹325 without earnings support.

Re-entry Zone: ₹225–₹235 with signs of improving profitability and volume support.

🧠 Final Verdict

Wipro is a solid long-term candidate with strong profitability, attractive dividend yield, and undervaluation relative to peers. While the negative PEG warrants caution, its fundamentals and sector positioning make it suitable for patient investors seeking stability and moderate growth.

Let me know if you'd like a comparison with other IT majors like Infosys or TCS.

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