Wipro Limited is a multinational information technology, consulting, and business process services company headquartered in Bangalore, India. The company has a strong presence in the Indian stock market, with its stock listed on the National Stock Exchange (NSE) of India. In this analysis, we will take a detailed look at the performance of Wipro’s stock on the NSE India.
Over the past few years, Wipro’s stock has witnessed significant ups and downs, primarily driven by macroeconomic factors and company-specific developments. In 2019, the stock delivered a total return of 7.7%, underperforming the broader Nifty 50 index, which delivered a return of 11.6%. The company’s financial performance was marred by the loss of a major client, which impacted revenue growth. However, the stock regained momentum in the last quarter of the year, owing to improved business outlook and the announcement of a share buyback program.
In 2020, Wipro’s stock witnessed a sharp decline in March, following the outbreak of the COVID-19 pandemic and subsequent lockdowns. The stock fell by 48% in just four weeks, hitting a low of INR 159. However, the stock recovered quickly, soaring to INR 286 by July 2020, driven by strong demand for its IT services, especially in the healthcare and life sciences sectors. The company’s revenue grew by 1.3% YoY in Q1FY21, primarily driven by growth in its healthcare and life sciences segment. Moreover, the company’s operating margins improved by 150 basis points, owing to cost optimization initiatives.
Wipro has also been in news for its recent acquisition of UK-based consultancy firm, Capco, for $1.45 billion. The acquisition is expected to bolster Wipro’s position in the financial services industry and provide cross-selling opportunities. The company’s management has been optimistic about the synergy potential and expects the acquisition to be EPS accretive from year one.
Wipro’s stock currently trades at a price-to-earnings (P/E) ratio of 18.6, lower than its peers in the IT services industry. The stock has a dividend yield of 0.29%, which is lower than the industry average. However, the company has a strong balance sheet, with a net cash position of INR 83.1 billion as of Q1FY21.
- Wipro Stock started it’s bullish breakout at Rs. 188 and stopped it’s bullish rally at Rs. 730
- In January-2022, Wipro share formed bearish engulfing candlestick pattern on monthly time frame which resulted in a bearish reversal. Wipro is trading at Rs.398 as we are writing.
- When we draw fibonacci retracement to the latest impulse wave on a monthly chart, we can see that price has already retraced to 0.618 fibonacci retracement level. This level can be a good trad entry point
- Most important to thing to observe in the above picture is, 0.786 Fibonacci retracement is exactly aligning with the previous support, and hence this level (300-280) becomes the most probable point of reversal for wipro share!
- First profit target for wipro share is Rs.1100 (1.618 extension) and the second target is Rs.1400 (2.618 extension).
- As per technical analysis, Wipro share is a good BUY at Rs.300 & Rs.400.
Wipro Stock – Fundamental Analysis
Below are some of the important fundamental factors of Wipro stock as of this post’s date.
| P/E Ratio | 17.79 |
| P/B Ratio | 2.7 |
| P/S Ratio | 2.27 |
| Sharpe ratio | 2.2 |
| Debt/Equity Ratio | 0.17 |
| Promoted shares | 0% |
CONCLUSION
In conclusion, Wipro’s stock performance has been volatile in recent years, primarily driven by macroeconomic factors and company-specific developments. The company’s recent acquisition of Capco is expected to provide growth opportunities, while its strong balance sheet provides the company with financial flexibility. However, investors should closely monitor the company’s revenue growth and margin outlook, as well as any significant client loss or regulatory changes that could impact the IT services industry.
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