company analysis wipro ltd adr

Company AnalysisCompany Analysis

Raution JaiswalRaution Jaiswal

Atkinson Graduate School of ManagementAtkinson Graduate School of Management

February 12, 2009February 12, 2009

Recommendation

Buy

Price: $9.95Current Price: 6.84ROI= 45.47•Total Revenue at $4.9 billion for 2007-08

•Total Employees ~100,000

•Total IT business ~ $4.3 billion

•85% of IT business is Services and 15% is Products

$5-Billion Diversified $5-Billion Diversified Global IT Service Global IT Service companycompanyPortfolio of services includes:Portfolio of services includes: IT consultingIT consulting custom application designcustom application design DevelopmentDevelopment Re-engineering and maintenanceRe-engineering and maintenance Systems integrationSystems integration Package implementationPackage implementation Technology infrastructure outsourcingTechnology infrastructure outsourcing BPO servicesBPO services Research and development services in the areas of Research and development services in the areas of

hardware and software designhardware and software design

Offshore Still Small Part of Overall Offshore Still Small Part of Overall SpendSpend

Growth in the companyGrowth in the company 5 year CAGR of Revenue 36% and Net Income of 34%5 year CAGR of Revenue 36% and Net Income of 34%

Revenue by SectorRevenue by Sector

Working their MagicWorking their Magic

Great brand associated with Great brand associated with innovation.innovation.

Quickly entering Emerging markets.Quickly entering Emerging markets. Strong balance sheet.Strong balance sheet. It is one of the largest beneficiaries of It is one of the largest beneficiaries of

the R&D services outsourced to India.the R&D services outsourced to India. It has a wide range of products in its It has a wide range of products in its

portfolio.portfolio. It has a long history of acquisitions and It has a long history of acquisitions and

integration.integration.

ShortcomingsShortcomings

Higher attritionHigher attrition

Dependence on matured marketsDependence on matured markets

Adverse currency fluctuationsAdverse currency fluctuations

Plan of Plan of Attack/StrategyAttack/Strategy

Differentiated Service linesDifferentiated Service lines Acquisitions Acquisitions Leadership in Emerging MarketsLeadership in Emerging Markets Total Outsourcing ServicesTotal Outsourcing Services MEGA Partnership -MEGA Partnership - Cisco, EMC, Microsoft, Cisco, EMC, Microsoft,

Oracle and SAPOracle and SAP InnovationInnovation

Risks to ConsiderRisks to Consider

High exposure to the telecom/tech High exposure to the telecom/tech sectors (36%)sectors (36%)

Slowdown in US economySlowdown in US economy Significant appreciation of rupeeSignificant appreciation of rupee Slowdown in the banking, financial Slowdown in the banking, financial

services and insurance (BFSI) sectorservices and insurance (BFSI) sector H1B visa quotasH1B visa quotas Acquisition-related risksAcquisition-related risks

OpportunitiesOpportunities

Strategic alliances

New global development centers

Growing consumer care market

Wipro: “Good BUY or Good Wipro: “Good BUY or Good BYE”BYE”

Quality standards

Strong financial performance

Diversified operations

Broad range of Research and development services

Thank You