WIT : NYSE : Technology
$9.75 | %
Today's Range: 0.00 - 0.00
Avg. Daily Volume: 624,500
09/26/16 - 4:02 PM ET

Financial Analysis


WIPRO LTD's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. WIPRO LTD has strong liquidity. Currently, the Quick Ratio is 1.97 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 7.33% 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 Q1 FY16 Q1 FY15
Net Sales ($mil)2014.41924.45
EBITDA ($mil)392.56404.23
EBIT ($mil)323.85356.22
Net Income ($mil)303.93344.66


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)4771.234354.8
Total Assets ($mil)11155.539947.38
Total Debt ($mil)1905.881286.11
Equity ($mil)7247.936752.76


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin32.0633.21
EBITDA Margin19.4821.0
Operating Margin16.0818.51
Sales Turnover0.70.76
Return on Assets11.6713.9
Return on Equity17.9620.48
Debt Q1 FY16 Q1 FY15
Current Ratio2.372.68
Debt/Capital0.210.16
Interest Expense6.14.97
Interest Coverage53.0671.69


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)2456.182454.47
Div / share0.00.0
EPS0.120.14
Book value / share2.952.75
Institutional Own % n/a n/a
Avg Daily Volume616338.0545610.0

Valuation


HOLD. This stock's P/E ratio indicates a discount compared to an average of 27.47 for the IT Services industry and a discount compared to the S&P 500 average of 25.19. Conducting a second comparison, its price-to-book ratio of 3.33 indicates a premium versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 8.10. 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 18.22 Peers 27.47   WIT 22.84 Peers 20.56

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.

 

Premium. 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 premium 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 16.68 Peers 21.95   WIT NM Peers 2.41

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

WIT is trading at a discount to 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 3.33 Peers 8.10   WIT -1.82 Peers 21.96

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.

 

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

However, WIT is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WIT 3.09 Peers 5.57   WIT 2.87 Peers 22.90

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 significantly trails its peers on the basis of sales growth

 

 

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