Wipro (WIT) AI Stock Analysis

• Market Cap: $30.10B
• Dividend Yield: 2.94%
• Average Volume (3M): 8.11M
• Price to Earnings (P/E): 21.3
• Beta (1Y): 0.96
• Revenue Growth: -1.95%
• EPS Growth: 62.75%
• Country: US
• Employees: 234,000
• Sector: Technology
• Sector Strength: 83
• Industry: Information Technology Services
• EPS (TTM): 0.04
• Shares Outstanding: 10,483,243,000
• 10 Day Avg. Volume: 7,189,625
• 30 Day Avg. Volume: 8,109,072
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.91
• Enterprise Value/Revenue: 0.03
• Enterprise Value/Gross Profit: 0.10
• Enterprise Value/Ebitda: 0.15
• 1Y Price Target: $2.69
• Price Target Upside: -4.27% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3

• Rating: 73 Outperform
• Price Target: $3.00 ▲(6.76% Upside)

Wipro's overall stock score is driven by its strong financial foundation and fair valuation, despite mixed technical signals and a cautiously optimistic earnings call. The company's strategic focus on large deals and AI initiatives provides potential for future growth, but geographic and sector-specific challenges remain.

Positive Factors

Client Base

WIPRO owns a strong client base with a diversified portfolio mix.

Market Position

WIPRO is a prominent player in the IT service sector, with a wide-ranging portfolio that spans 66 countries, serving over 1,400 clients.

Negative Factors

Economic Conditions

Potential global recession and rising inflationary pressures will hurt IT services' spending as companies divert their focus to cost initiatives from growth initiatives.

Revenue Growth

WIPRO's strong deal wins are yet to translate into meaningful revenue growth due to longer deal timelines and delays.

Supply Challenges

Supply-side challenges continue to keep margins under pressure.

Wipro Business Overview & Revenue Model

Company Description

Wipro Limited operates as information technology (IT), consulting, and business process services company worldwide. It operates through three segments: IT Services, IT Products, and India State Run Enterprise Services (ISRE). The IT Services segment offers IT and IT-enabled services, including digital strategy advisory, customer-centric design, technology and IT consulting, custom application design, development, re-engineering and maintenance, systems integration, package implementation, cloud and infrastructure, business process, cloud, mobility and analytics, research and development, and hardware and software design services to enterprises. It serves customers in various industry sectors, such as healthcare and medical devices, consumer goods and life sciences, retail, transportation and services, communications, media and information services, technology products and platforms, banking, financial services and insurance, manufacturing, hi-tech, energy, and utilities. The IT Products segment provides a range of third-party IT products comprising enterprise platforms, networking solutions, software and data storage products, contact center infrastructure, enterprise security, IT optimization technologies, video solutions, and end-user computing solutions. It serves enterprises in various industries primarily in the India market, which comprise the government, defense, IT and IT-enabled services, telecommunications, manufacturing, utilities, education, and financial services sectors. The ISRE segment offers IT services to entities and departments owned or controlled by the Government of India and/or various Indian State Governments. The company was incorporated in 1945 and is based in Bengaluru, India.

How the Company Makes Money

Wipro generates revenue primarily through its IT services and consulting segments, which consist of various offerings such as application development, infrastructure management, and digital transformation services. The company operates on a time-and-materials and fixed-price contract basis, allowing it to earn revenue based on the services rendered and project deliverables. Key revenue streams include project-based services, managed services, and long-term contracts with clients. Wipro also benefits from strategic partnerships with major technology providers like Microsoft, SAP, and Oracle, which enhance its service offerings and enable access to new markets. Additionally, the company has been focusing on expanding its presence in emerging technologies like artificial intelligence, machine learning, and cloud services, which are expected to drive future growth and profitability.

Wipro Financial Statement Overview

Summary

Wipro demonstrates strong financial health with robust profitability and a solid balance sheet. The company maintains a low debt-to-equity ratio and effective equity utilization. However, challenges in free cash flow growth slightly temper the overall financial performance.

Income Statement

Wipro has demonstrated strong profitability with a consistent gross profit margin of around 30% and a net profit margin that has improved over the past year to approximately 15%. The company shows a stable EBIT margin of 17% and a solid EBITDA margin of 24%. Revenue growth has been relatively modest, indicating a mature phase in its business cycle. Overall, Wipro's income statement reflects a profitable and stable operation with room for growth in revenue.

Balance Sheet

Wipro's balance sheet is robust with a low debt-to-equity ratio of 0.23, indicating prudent financial leverage. The return on equity stands at an impressive 15.86%, showcasing effective utilization of shareholder equity. The equity ratio of 64.4% suggests strong solvency, with significant shareholder equity in total assets. The company's financial position is stable, with a solid foundation for future growth.

Cash Flow

The cash flow analysis reveals a strong operating cash flow to net income ratio of 1.29, indicating efficient cash generation relative to net income. However, the free cash flow has seen a decline, with a free cash flow growth rate of -6.84% year-over-year. Despite this, the free cash flow to net income ratio remains strong at 1.18, suggesting good cash profitability. Overall, Wipro's cash flow position is solid but faces challenges in maintaining free cash flow growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	892.59B	890.88B	897.60B	904.88B	790.93B	619.43B
Gross Profit	270.85B	273.08B	266.11B	259.43B	235.06B	196.22B
EBITDA	183.55B	213.78B	193.83B	189.38B	165.30B	168.41B
Net Income	134.69B	131.35B	110.45B	113.50B	122.19B	107.95B
Balance Sheet
Total Assets	1.31T	1.29T	1.15T	1.18T	1.08T	831.43B
Cash, Cash Equivalents and Short-Term Investments	―	532.37B	407.79B	401.87B	351.28B	346.12B
Total Debt	158.74B	192.03B	164.65B	174.67B	175.93B	104.51B
Total Liabilities	437.08B	456.07B	401.24B	394.07B	420.51B	276.84B
Stockholders Equity	868.90B	828.31B	749.88B	781.16B	658.16B	553.10B
Cash Flow
Free Cash Flow	155.43B	154.39B	165.71B	115.77B	90.64B	127.97B
Operating Cash Flow	170.59B	169.43B	176.22B	130.60B	110.80B	147.55B
Investing Cash Flow	-42.26B	-80.73B	11.68B	-84.06B	-224.50B	7.74B
Financing Cash Flow	-103.63B	-63.96B	-182.57B	-60.88B	46.59B	-128.84B

Wipro Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2.81
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WIT, the sentiment is Neutral. The current price of 2.81 is above the 20-day moving average (MA) of 2.73, below the 50-day MA of 2.85, and below the 200-day MA of 3.10, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 53.76 is Neutral, neither overbought nor oversold. The STOCH value of 72.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WIT.

Wipro Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EXLS	77 Outperform	$7.04B	30.17	24.70%	―	15.15%	34.33%
INFY	75 Outperform	$72.48B	22.41	30.46%	2.92%	4.52%	-0.22%
CTSH	74 Outperform	$35.01B	14.65	16.69%	1.70%	6.34%	12.16%
WIT	73 Outperform	$30.10B	21.31	16.50%	2.94%	-1.95%	62.75%
ACN	70 Outperform	$159.09B	20.38	27.27%	2.30%	6.21%	14.87%
JKHY	68 Neutral	$11.81B	25.91	22.94%	1.39%	7.21%	19.35%
Sector *	61 Neutral	$35.62B	7.50	-10.94%	1.87%	8.86%	-10.27%