WIT : NYSE : Technology
$10.54 up 0.03 | 0.29%
Today's Range: 10.51 - 10.58
Avg. Daily Volume: 606800.0
05/24/17 - 10:39 AM ET

Financial Analysis


WIPRO LTD's gross profit margin for the fourth quarter of its fiscal year 2016 has decreased when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. WIPRO LTD has strong liquidity. Currently, the Quick Ratio is 1.99 which shows the ability to cover short-term cash needs. The company managed to increase its liquidity from the same period a year ago, despite already having strong liquidity to begin with. This would indicate improved cash flow.

During the same period, stockholders' equity ("net worth") has increased by 14.04% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)2443.042052.57
EBITDA ($mil)0.0411.96
EBIT ($mil)354.44356.82
Net Income ($mil)392.08336.9


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)5315.964549.92
Total Assets ($mil)12236.1810942.2
Total Debt ($mil)2196.021890.13
Equity ($mil)8023.197035.14


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin28.132.38
EBITDA Margin0.020.07
Operating Margin14.5117.38
Sales Turnover0.690.71
Return on Assets10.6912.28
Return on Equity16.3119.11
Debt Q4 FY16 Q4 FY15
Current Ratio2.352.31
Debt/Capital0.210.21
Interest Expense9.886.16
Interest Coverage35.8957.93


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)2417.172455.88
Div / share0.030.07
EPS0.160.14
Book value / share3.322.86
Institutional Own % n/a n/a
Avg Daily Volume595024.0584638.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 30.61 for the IT Services industry and a discount compared to the S&P 500 average of 25.02. To use another comparison, its price-to-book ratio of 3.13 indicates valuation on par with the S&P 500 average of 3.00 and a significant discount versus the industry average of 9.31. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, WIPRO LTD proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
WIT 19.22 Peers 30.61   WIT 17.54 Peers 21.27

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

WIT is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

WIT is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
WIT 18.80 Peers 21.60   WIT NM Peers 1.55

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

WIT is trading at a valuation on par with its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

WIT's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
WIT 3.13 Peers 9.31   WIT -1.82 Peers -6.96

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

WIT is trading at a significant discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

WIT is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WIT 2.96 Peers 5.43   WIT 9.72 Peers 11.84

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

WIT is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

WIT trails its peers on the basis of sales growth

 

 

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