equity research report wipro [2012]

Equity Research Report OfWIPRO

[2012-2013]

• Presented By : Mr. Vishal Narvekar

Company overview

Type :Public Ltd. Company Industry :IT Services, IT ConsultancyFounded :Amalner, Maharashtra

(December1945)Founder :Mr. Mohamed Hasham Premji Headquarters :Bangalore, Karnataka, India Services :IT, Business Consulting And

Outsourcing servicesEmployees :1,40,569 (As on march 2012)

Shareholding Pattern[As on March 2012]

80%

7%

5%4% 2% 1% 1%

0%

Promoters Foreign Companies General PublicOther Financial Institutions Foreign NRIBanks Mutual Funds Directors

Shareholding Pattern[As on March 2012]

Total share capital :- Rs.491.7 Cr. Source: economictimes.com

WIPRORevenue Statement

[2008-2011]Source :- www.moneycontrol.com

Particular March ’12 March ‘11 March ’10 March ‘09 March ‘08

Income In INR [CR]

Sales Turnover31,803.40 26,401.20 23,006.30 21,612.80 17,658.10

20.46% 14.75% 6.44% 22.39% 28.34%

(Excise Duty) 120.50 100.70 84.30 105.50 165.50

Net Sales31,682.90 26,300.50 22,922.00 21,507.30 17,492.60

20.46% 14.73% 6.57% 22.95% 27.83%

Other Income 524.90 603.30 866.70 -480.40 326.90

Stock Adjustments -44.90 31.60 111.00 -3.80 187.00

Total Income 32,162.90 26,935.40 23,899.70 21,023.10 18,006.50


(Expenditure) In INR [CR]

Raw Materials 4,684.90 3,805.60 3,768.80 3,438.80 3,139.30

Power & Fuel Cost 233.40 199.70 141.40 154.00 0.00

Employee Cost 13,223.70 10,937.40 9,062.80 9,249.80 7,409.10

Other Manufacturing

Expenses3,722.90 2,780.20 2,145.30 1,687.80 299.80

Selling and Admin Expenses 2,057.60 1,703.30 1,491.40 1,523.00 557.80

Miscellaneous Expenses 1,495.80 1,145.00 921.80 691.40 2,558.00

Total Expenses25,418.30 20,571.20 17,531.50 16,744.80 13,964.00

23.56% 17.33% 4.69% 19.90% 32.79%


Operating Profit6,219.70 5,760.90 5,501.50 4,758.70 3,715.60

7.96% 4.71% 15.60% 28.07% 14.16%

PBDIT6,744.60 6,364.20 6,368.20 4,278.30 4,042.50

5.97% -0.06% 48.84% 5.83% 14.09%

(Interest)79.90 58.60 99.80 196.80% 116.80

36.34% -41.28% -49.28% 68.49% 1522.22

PBDT6,664.70 6,305.60 6,268.40 4,081.50 3,925.70

5.69% 0.59% 53.57% 3.96% 11.02%

(Depreciation) 739.50 600.10 579.60 533.60 456.00

Other Written Off 6.60 0.00 0.00 0.00 0.00

Profit Before Tax 5,918.60 5,705.50 5,688.80 3,547.90 3,469.70

(Extra-ordinary items) 0.00 0.00 0.00 1.00 0.00


PBT (Post Extra-Ord Items) 5,918.60 5,705.50 5,688.80 3,547.90 3,469.70

(Tax) 1,233.50 861.80 790.80 574.10 406.40

Reported Net Profit

4,685.10 4,843.70 4,898.00 2,973.80 3,063.30

-3.27% 1.10% 64.70% -2.92% 7.78%

Net Sales 0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

45,000.00

31,682.90

38,858.54

8,907.22

31,254.00

WIPRO TCS HCL INFOSYS

Sales Turnover 0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

45,000.00

31,803.40

38,858.79

8,907.22

31,254.00

WIPRO TCS HCL Infosys

Total Expenses 0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

25,418.3027,472.56

6,371.15

21,191.00


Operating Profit 0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

6,219.70

11,385.72

2,510.22

10,063.00


Interest 0

20

40

60

80

100

120

79.9

16.4

97.27

2


Net Profit 0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

4,685.10

10,975.98

1,950.42

8,470.00


Grade in revenue statement analysis

4th HCL

“C” Grade

3rd INFOSYS

2nd WIPRO

1st TCS

GDP 1,847.98

Bill.USDBalance of Trade

(1,086.12) Bill.INR Inflation

6.62%Index of industrial production

(0.60) % Exports 1,389.82

Bill.USDExchange Rate ($-Rs)

54.91 Rs. REPO 7.75%RE-REPO 6.75%

Economic analysis

http://www.tradingeconomics.com

India China Russia Brazil

54.91

6.23

30.73

1.98

Exchange Rate

Exchange Rate


1389.82

187366

4060015966.73

Exports

Exports


1847.98 7298.1 1857.77 2476.65

GDP

GDP


6.62

2

7.16.15

Inflation

Inflation

Industry analysis

Contribution to Indian GDP 11-12 Q4 18.2%

Growth rate of IT 11-12 Q4 9.4%

Value of IT industry BSE-S&P [BSE IT] 6,763.05 INR

Market Capitalization of IT BSE-S&P [BSE IT](Free float)

3,04,239.45 Cr. INR 10.45% of 100%

Volume of shares traded BSE-S&P [BSE IT] 356.90 Lac

Value of shares traded BSE-S&P [BSE IT] 0.19 Cr. INR

Turnover BSE-S&P [BSE IT] 74.8001 Cr. INR

P/E Ratio BSE-S&P [BSE IT] 19.60

Source :- www.bseindia.com& www.finmin.nic.in

“A” Grade

Grade in industry analysis

Ratio AnalysisSource :- www.money conrol.com

Liquidity Ratio Wipro

Current ratio 2.56

Quick ratio 1.26

Solvency Ratio

Debt to equity 0.21

Debt asset ratio 0.24

Interest coverage ratio 84.41

Financial Charges Coverage Ratio 88.66

Profitability Ratio

Gross profit margin ratio 30.84

Operating profit margin ratio 19.63

Net profit margin ratio 14.39

Return on capital employed 22.78

Source :- www.money conrol.com

Efficiency Ratio Wipro

Receivable turnover ratio 91

Inventory turnover ratio 48.33

Working capital turnover ratio 2.24

Valuation Ratio

Earning per share 23.19

Price earning ratio 18.33

Dividend payout ratio 36.59

Book value per share 99.04

Source :- www.money conrol.com

Grade in ratio analysis

4th HCL

“A” Grade

3rd INFOS

YS

2nd TCS1st

WIPRO

SWOT analysis of WIPRO

Strengths:Strong & Global R&D facilityLarge employee base & Diversified skill base across service linesImpressive list of clienteleMEGA Partnership – Cisco, EMC, Microsoft, Oracle & SAP

Weaknesses:Domestic market is huge but underdevelopedSmall player in global marketClients not trusting the capabilities of Indian Software Companies High reliance on foreign market

Opportunities:In the consultancy areaIn the emerging technology areas like Blue Tooth, WAP etc.Huge global marketIT sector booming

Threats:Increasing cost of human capitalSlowdown in the US economyCompetition by Indian companies in domestic market [Emerging small IT companies]Exchange rate

Source :- www.indiansplash.com

Technical analysis

Selling Target

Price : Rs. 440

5/03/2013BSE:419.55NSE:419.50

• Wipro's board of directors has approved the demerger of non-it businesses (Consumer care, lighting, infrastructure, medical product) business will be demerged. These businesses will come under Wipro Enterprise ltd.

• The move is positive for the company as the focus on IT services will sharpen

• On share holding of five equity shares with face value of Rs.2 each, the share holder will get one equity share with face value of Rs.10 in Wipro Enterprise Ltd.

• Mahindra World City, Jaipur's IT / ITES zone to be developed by Wipro Ltd

• Wipro has signed an agreement to acquire 100% shareholding of the L.D. Waxsons Group, a Singapore based FMCG company

Future outlook

Advice to investor

Industry Analysis

Revenue Statement

Analysis

Ratio Analysis

Technical Analysis

‘A’ Grade “C” Grade ‘A’ Grade

Call :“BUY”

Selling Target Price : Rs. 440

Source Website Namehttp://www.moneycontrol.com

http://www.indiansplash.comhttp://money.rediff.comhttp://fms-syssoc.nethttp://www.nse india.com

http://www.bseindia.comhttp://www.tradingeconomics.comhttp://www.bseindia.comhttp://www.wipro.comhttp://en.wikipedia.org/wiki/Wiprohttp://economictimes.indiatimes.com/wipro-ltd

THANK YOU