Recommendation: Buy
Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside |
---|---|---|---|---|---|---|---|
25 Jun, 24 | WIT | Buy | USD 5.83 | USD 6.2 | USD 6.85 | 24 days | 17.5% |
Data Powered by EOD Historical Data (“EODHD”).
Wipro Limited operates as an 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 Indian 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. It also provides cybersecurity consulting services. The company has a partnership with ServiceNow, Inc. to develop Wipro CyberTransform - Intelligent ServiceNow Risk and Security Solutions. The company was incorporated in 1945 and is based in Bengaluru, India.
Large deal bookings reached a total contract value (TCV) of USD 4.6 billion in Q4FY24, a 17.4% growth from the previous year
Free cash flow amounted to USD 2002.1 million in FY24, increased from USD 1441.6 million in FY23
Lower returns to shareholders: ROE of 14.4% in FY24 vs. industry median of 26.5%
Higher Balance sheet risk: Debt/Equity ratio of 0.22x in FY24 vs. industry median of 0.07x
Client Concentration Risk, Cybersecurity and Data Privacy Risks
Entry Price | Support* | Target 1 | Target 2 |
---|---|---|---|
5.83 | 4.9 | 6.2 | 6.85 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Technical Summary:
Considering the decent fundamentals, associated risks, consistency in top line financials, improved free cash flow generation, other key financial highlights, and current valuation, a "Buy" recommendation is given on the stock at the closing price of USD 5.83, as of June 24, 2024.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Information Technology Services
Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
---|---|---|---|---|---|---|---|---|
WIT Wipro Limited ADR |
-0.0108 0.30% | 3.64 | 21.19 | 17.70 | 0.03 | 3.20 | 0.03 | 0.15 |
ACN Accenture plc |
-7.41 2.02% | 358.96 | 31.75 | 28.09 | 3.49 | 7.94 | 3.45 | 20.00 |
IBM International Business Machines |
-0.535 0.24% | 222.82 | 20.85 | 16.29 | 2.43 | 6.44 | 3.21 | 13.87 |
FI Fiserv, Inc. |
-1.65 0.80% | 204.40 | 28.20 | 15.58 | 4.24 | 2.70 | 5.45 | 13.13 |
INFY Infosys Ltd ADR |
- -% | 22.73 | 25.55 | 22.78 | 4.20 | 8.01 | 4.10 | 15.87 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is June 24, 2024. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Note 4: The report publishing date is as per the Pacific Time Zone.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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