Academic project – Not a Recommendation

Equity Research Report

Wipro Ltd
Tension in Revenue and Margin are
likely to continue
About The company Recommendation :XXX
CMP :418
Wipro Ltd is Global Information Technology and Consulting company. Target Price :XXX
The company is headquartered in Bangalore, India. Wipro Ltd was
incorporated in the year 1945 at Karnataka by Azim H Premji who is Stock Data(as on Sep 11,2023)
promoter and chairman of the company. At First Wipro was the edible
oil and FMCG company but over the year Wipro transformed itself in
Nifty : 19799.1
the IT service company. 52 Week H/L (INR) : 443.75/352
Market Cap (INR Crs) : 230155
In 2020 Wipro has change its business operation by introduced new
Outstanding Shares(Crs) : 549
operation model which include 2 GBL(Global Business Line) iDEAS
(Integrated Digital, Engineering and Application Services) and iCORE Dividend Yield(%) : 0.24%
(Integrated Cloud Infrastructure, Digital Operations, Risk and Enterprise NSE Code : Wipro
Cyber Security Services) and 4 SMU(Strategic Market Units) America 1,
America 2, Europe, And APMEA(Asia Pacific/Middle East/Africa). From Relative Stock Performance-1Y
31,March,2023 Wipro introduce new GBL which are Wipro FullStride
Cloud, Wipro Enterprise Futuring, Wipro Engineering Edge, Wipro
Consulting In FY24 Wipro will operate under this operation model.

Overall View
Management of Wipro has say’s that volatility in revenue and margins
are due to less discretionary spending by customer’s due to macro
Oct-2022 Jan-2023 Apr-2023 Jul-2023
economic environment. With the war between Israel and Hamas these
macro economic environment will remain same due to this we might Nifty 50 Wipro
see some more uncertainty in revenue and margins the Q2 of FY24
might perform well because management is guided with -2% and 1% Absolute return(%)
growth in revenue and similar range for margin. So comparing it with
Q1FY24 estimate we find that they are on track of growth and 1 Year :4.32%
recovery. 3 Year :12.79%
Wipro EV/EBITDA stood at 12.4 which need’s to be come down means
5 Year :79.67%
currently wipro is overvalued. Wipro has attrition rate 14% in Q1 FY24
comparing to Q4 FY23 is stood at 14.1% it might due to fear of layoff’s Shareholding Pattern(as on June 30,2023)
we study that this downtrend in attrition rate are coming across the
sector and we feel that this is due to fear of layoff. Recently many it Promoter's :72.97%
firm has done massive layoff with this kind of environment the worker FIIs :6.46%
might hesitating to change the job that’s we are seeing it in matter of
time when the macro environment became neutral the company DIIs :2.39%
might see some rise in attrition rate. Public :10.28%
Other :7.9%
Key Highlight
Financial
• Wipro Revenue Growth of FY23 is 14% and Revenue stood at Summary
90,488 Cr.(In INR). and EBITDA margin’s are decline by 2.42% in
absolute term and Net profit margin’s are decline by 2.8% in In INR Crs FY23 FY24E FY25E
absolute term. Net Revenue 90488 97579 107803
• Wipro also witness the slowdown in sales growth. In FY22 sales YOY Growth % 14% 7.8% 10.5%
growth was 28% and in FY23 Sales Growth is 14%.
• Currently Wipro has 2,57,311 Employee and 1,341 Client (as on EBITDA 16848 17859 20973
31,march,2023) in six continent and generating 80-85% revenue EBITDA
from export of service to America and Europe and rest 20%-15% Margins(%) 19% 18% 19%
revenue from rest of the world.
• Wipro has assigned a new director CEO in July 2020 Mr. Thierry PAT 11367 12049 13853
Delaporte. he also serves as Independent Director at Compagnie YOY Growth % -7% 6% 15%
de Saint-Gobain S.A. ROE 15% 15.5% 17.30%
• In Sep,2023 company CFO Mr. Jatin Pravinchandra Dalal resigns
and Wipro appoint Miss. Aparna C. Iyer as new CFO of the
EPS 20.7 20.60 22.9
company. EV/EBITDA 12.4 10.80 9.5
Academic project – Not a Recommendation

Wipro Ltd

Global Economy Outlook

GDP Growth %
The IMF predicts that global economic growth will slow to 2.9%
in 2024, down from an expected 3% this year. Central banks 0.00% 2.00% 4.00% 6.00% 8.00%
around the world have taken drastic measures to control
inflation through rate increases, but these actions are weighing World Output
heavily on global economic growth. This weakness is expected to
continue until rate cuts begin later next year and work their way Advance Economies
through the economy. The U.S. and Europe are likely to avoid a
Emerging Market And
recession. with geopolitical instability and inflation remaining
Developing Economics
two of the most frequently cited risks to the global economy.
Central banks will continue their campaigns to combat inflation. America
Following the Russia-Ukraine War, the Israel and Hamas conflict
became the center of geopolitical instability, leading to an Europe
increase in oil prices, which, in turn, exacerbated inflation.
Central banks might continue hiking interest rates. High energy China
prices are unwelcome news for Europe, which already faced this
crisis during the Russia-Ukraine War. Economists suggest that India
the employment rate in Europe should remain stable, while
wages, which haven't kept pace with inflation, are accelerating
and are expected to continue to do so. The combination of 2022 2023P 2024P
declining inflation and rising wages means that workers should
Source: IMF WEO 2023
start to see their purchasing power increase later this year and
into 2024. Source: IMF, Morgan stanley

Indian Economy Outlook

India vs Global GDP Growth(%)
6.80% 7.20% The Indian economy, according to IMF estimates, will emerge
6.50% 6.30% 6.30% as the world’s third largest economy by 2027, hopping over
3.90% Japan and Germany, as its GDP crosses US$5 trillion dollars. By
2047, India aspires to be a developed economy.

The IMF's forecast is based on strong consumption demand. In

the April-June quarter of 2023, production of Capital goods
2018 2019 2020 2021 2022 2023P 2024P rose by 4.9% YoY, Infrastructure and construction goods rose
by 14.0% YoY, Consumer durables contracted by 2.8% YoY,
Consumer non-durables rose by 6.7% YoY. With Strong
Consumption demand Indian has a capability to avoid recession
-5.80% and attract business to Indian which lead to better employment
India Global and this create an cycle which support India for constant
growth.
Indian GDP Quarterly Growth-
In China, the pandemic-related slowdown in 2022 and the
Actual VS Projected property sector crisis contribute to the larger output losses of
16.00% about 4.2%, compared with pre-pandemic predictions. Other
emerging market and developing economies have seen even
14.00% weaker recoveries, especially low-income countries, where
12.00% output losses average more than 6.5%. Due to Crisis in China
India is emerging as the best place to operate business. But
10.00% India still need to go very long way to became and export
15.20%

dominating country but we are in way to do it. India has the

13.50%

8.00%
youngest workforce and also the good land resource and India
6.00% is the economy which know’s for avoiding recession due to
8.40%
8.40%

7.80%
7.70%
6.30%
6.20%

6.10%

higher consumption demand. But India might face some issues

6.00%
5.40%

4.10%
4.00%

4.40%
4.60%

4.00%
4.60%

regard to energy price hike but its only for short-term which
2.00% has very little or no effect on India GDP growth.
Q2FY22Q3FY22 Q4FY22Q1FY23Q2FY23Q3FY23 Q4FY23Q1FY24 Source: IMF, Multiple Report

Actual Projected
Academic project – Not a Recommendation

Wipro Ltd

Global IT Industry Outlook Global IT Spending divided in Sub-Segment

(In Millions U.S. Dollars)
The global IT services industry continues to be a highly
fragmented one, with even the largest provider having a mid-
1500000
single digit market share. the global GDP is estimated to have
grown at a more subdued 3.5% in 2022, versus 5.9% in the 1300000
prior year1. Global technology spending on Enterprise
software and IT services crossed the $2 trillion mark in 2022, 1100000
growing 5.5% YoY. IT services grew 3.5% YoY, to $1,250 900000
billion. This growth was led by accelerated cloud adoption,
preference for external expertise due to severe talent 700000
scarcity, and expanding scope of digital transformation to
500000
cover more back-office operational areas. In Future we might
see decline in technology spending due to Israel Hamas war. 300000
Increase in crude oil price may lead to high interest rate and it
cause less spending in technology. 100000
2021 2022 2023P 2024P
The IT services and software segments are projected to grow Data Center Systems Devices
at 6.1% and 11.9%, respectively, over the next five years.
While cost corrections and softening demand remain Software IT Services
concerns–and there may be uncertainties in the near term. Communications Service Linear (IT Services)
Source: IMF, Company Analysis Source: Gartner

Geographic Breakup of Indian IT Industry Outlook

export Revenue %
The IT industry accounted for 7.4% of India’s GDP, as of FY22.
And it is expected to contribute 10% of India’s GDP by 2025.
According to National Association of Software and Service
Companies (Nasscom), the Indian IT industry’s revenue touched
US$ 227 billion in FY22, a 15.5% YoY growth and is estimated to
have touched US$ 245 billion in FY23. As per a survey by AWS
2%
8% (2021), India is expected to have nine times more digitally
skilled workers by 2025. A preferred destination for IT & BPM in
the world, India continues to be a leader in the global sourcing
industry with 52% market share (as of FY20) in services exports
11%
from the country.

According to the Strategic Review 2023 published by NASSCOM

(“NASSCOM Report”), revenue for the Indian IT services’ sector
is expected to witness growth of 8.3% year-on-year in fiscal year
2023. Indian IT service sector revenue are majorly concentrated
17% and coming from 2 major economy’s America and Europe. So
62% slowdown in this economy will highly effect the revenue of
these companies and as well as growth will also effect revenue
of these company. However, the domestic market is also
significant, with robust revenue growth.

BFSI is a key business vertical for the IT & BPM industry. A major
share of revenue of IT majors comes from the BFSI business
vertical. Adoption of new technologies is expected to accelerate
growth of the BFSI vertical. The need for undertaking
investment in IT will also be required for gaining competitive
advantage instead of solely reducing operational costs. In long
US UK Europe APAC ROW term IT sector will dominate the world with new revolutionary
technology such as AI and ML. Which will became the back bone
of every sector in coming Year’s.
Source: IT & BPM sector report by IBEF Source: IT & BPM sector report by IBEF
Academic project – Not a Recommendation

Wipro Ltd

 Financial Analysis
• Volatility in Revenue growth is a big concern and decreasing margin show the competitive market of IT industry. In past 2 year Wipro
shown a high sales growth but we can also see the high Debtor Growth in their book in recent 2 year.
• Debtor day’s are decreasing from 2022 it might due to new business operation model. After implanting the new operation model in
2020. In 2021 Wipro has seen 1.3% growth in sales but this whole sales was a cash sales and in the next year their sales growth was
28.06% but this sales was a credit sales and we can compare it with CFO/EBITDA in 2021 it was 99.9% and in 2022 it was 66.4%. With
this we can assume that in 2021 Wipro management is removing debtor but when this can’t help them to increase sales they applying
new approach with less debtor day’s and that’s why we can see decreasing debtor day’s in Wipro from 62 day in 2020 to 51 days in
2023 and Wipro has lowest debtor day’s in the industry.
• Wipro has increase in debt from 2020, it might due to their recent acquisition of Capco in 2021, Edgile in 2021,Rizing in 2022, CAS in
2022 and these all are mostly consulting firm and information technology company specialize in consulting. But Debt is not an issue
because Wipro financial condition is great they have Interest coverage ratio of 16 and Debt to Equity 0.22.
• Wipro had a strong base of 1,479 customers as on March 31, 2023 (1,444 as on June 30, 2023), with 97.4% of its business generated
from existing clients in FY2023. The company’s customer base is diversified with its top customer generating 3.2% and its top five
customers generating 12.9% of its revenues.

 Ratio Analysis
 Profitability Ratio Analysis  Leverage Ratio Analysis
• Margin’s are decreasing, lowest in industry. • In recent Wipro has taken debt. Due to this we can see
• Exp growth are greater than sales growth increase in Leverage Ratio in FY22 but situation are getting
• Sustainable growth rate is nominal as country growth stood on track in FY23 all ratio are getting down. Their Financial
at 13.9% position is well so debt has not any major consequence in
• In recent year their sales growth was good but most of their their book.
sales are coming from debtor.  Capital Allocation Ratio Analysis
 Efficiency Ratio Analysis • ROCE is decreasing due to margin decreasing and their
• Debtor day are in decreasing and they have lowest in the Capital turnover ratio is also not performing good.
industry (51Day in FY23) • ROE is decreasing. Due to margin decreasing and Assets
• Debtor Turnover ratio is increase from 6.88 to 7.16 turnover ration is neutral.
• Inventory turnover is high due to their stock in trade is only • ROIIC is 5.62% and their intrinsic compounding rate is
119cr but 97% - 98% revenue coming from IT service. IT 3.54% and Reinvestment rate is at 63%.
product segment is not major part of their business.
• Net Fixed assets turnover ration is decline because Fixed  Cash Ratio Analysis
assets are doubled in 4 year but sales are not that's why we • Operating Cash Flow growth and Free Cash Flow Growth is
seeing decline in this ratio in Cyclical growth. According to this cycle in FY24 we will see
negative growth this year.

Key Ratios Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Enterprise Value (EV) 136593.1 147837.6 107656.7 220389.0 331694.8 208724.1
EV/EBITDA 13.15 12.73 8.72 14.92 19.88 12.39
Free Cash Flow Growth -18.0% 50.3% -17.9% 64.2% -29.0% 27.3%
FCF/Sales 12% 16% 13% 21% 12% 13%
Return on Invested Capital 14.0% 17.9% 19.3% 22.5% 16.9% 13.2%
Return on Capital Employed 17.5% 18.5% 20.0% 22.1% 18.9% 16.6%
Debt/Equity 29.0% 17.6% 17.6% 19.0% 26.9% 22.5%
Debt/Assets 18.4% 12.0% 12.0% 12.7% 16.4% 14.9%
Interest Coverage (Times) 18.57 16.65 17.72 28.32 29.43 15.65
Operating Leverage 4.71 2.02 1.70 13.09 0.47 -0.05
Financial Leverage 1.57 1.46 1.46 1.50 1.64 1.51
Debtor Days 67.65 62.15 62.37 55.57 53.02 50.97
Debtor Turnover 5.40 5.87 5.85 6.57 6.88 7.16
Sales Growth -1.7% 8.3% 3.6% 1.3% 28.1% 14.1%
Academic project – Not a Recommendation

Wipro Ltd

Expenses Growth 0.4% 8.0% 1.8% -2.7% 33.1% 17.4%

Sustainable Growth Rate 15.8% 14.9% 16.6% 18.8% 13.7% 13.9%
EBITDA Growth -8.2% 11.8% 6.3% 19.7% 12.9% 1.0%
EBIT Growth -8.2% 16.8% 6.1% 17.1% 13.3% -0.7%
PBT Growth -7.2% 12.7% 6.1% 13.5% 8.9% -2.5%
Net Profit Growth -6.0% 12.7% 8.4% 11.2% 12.7% -7.2%
Operating Margin 19.1% 19.7% 20.2% 23.8% 21.0% 18.6%
PBT Margin 18.8% 19.6% 20.0% 22.4% 19.1% 16.3%
Net Margin 14.7% 15.3% 16.0% 17.5% 15.4% 12.6%

Con Call Analysis Q2 FY24 and Q1 FY24

 Their SMU highlight are as follow :-

• America I market unit revenue grew 1% QoQ. Revenue growth lead by strong performance in healthcare and technology products.
• America II market unit decline by 2.3% QoQ. Due to high exposure to consulting clients and to the BFSI sector America II market was
declined.
• Europe which is the growth engine for two quarters has seen slow demand and reprioritization of client spend, weighing on the
overall business revenue in this market declined 5% QoQ.
• APNEA market revenue is decline by 0.5% QoQ. Their goal in this region is absolutely to capture the rapidly digitizing market.
• IT service Revenue for Q2 declined 2% QoQ in constant currency terms, which is at the lower end of the guided range for the
quarter.

• Due to macro uncertainty there's a reduction of what company call the discretionary spend. According to management the
reduction in spending are usually from smaller deals. Once the customer is start spending than we can see the growth in company.
And Their segmentation strategy together with the one-way pro approach is helping them to seal bigger deals with existing clients
and win in a consolidating market. Large deals that may take a little bit more time to convert into revenue but they have the less
discretionary spending. They have certain volume of their business that is more discretionary which is little more exposed than some
others because of our significant presence in consulting business.
• According to management the slowdown in growth is through BFSI. Certainly the financial service sector has been significantly
slower this year. Slowdown started in America and than it moved to Europe. Due to this Banks are definitely focusing on cost takeout
and productivity.
• According to management their two engines or two legs for revenue performance. First is new deals and the Large deal sign every
quarter. Second leg of growth is discretionary work. So effect in any leg would directly effect the revenue performance. In Q2 FY24
they closed $1.3Billion in large deals highest in nine quarters represents 79% YoY growth and 6% growth QoQ. During this Quarter
they booked 14 deal in the greater than $30 million TCV range Versus 10 in pervious quarter. Total booking from a TCV standpoint
stand at $3.8billion, Which is the growth of 6% YoY.
• Wipro has meet their previous guidance of -2% to 1% growth in revenue. Revenue decline by -2% and their guidance for Q3 is -3.5%
to -1.5%. Management has said that currently their focus is on margin to keep it in similar range. But their focus would be to get back
to a growth momentum as soon as macro environment will be on track.
• According to management their margin are depend on 3 points, Improving Productivity in their fixed price project, A better
utilization of talent and managing their fixed cost.
• Wipro announced a USD 1 billion investment in AI and launched a new AI-first innovation ecosystem called Wipro ai360. This
ecosystem basically will bring together Wipro's full range of capabilities. And this whole investment is organic funded by operation.
Two-third of the investments of Wipro Ventures are in the AI field.
• Management has said that Over the next 12 months, they will train their entire workforce, nearly 250,000 employees, in AI. In Three
month they trained their 180,000 employees in basic Gen AI general principles.
• They did their last salary increase in September and in the year 2024 they are planning to do it in 3rd quarter. Despite the declining
revenue and flat margin they are still increasing the salary according to management their may more headwinds in the upcoming
quarter.
• According to management they are now actually started doing more complex deals which allow you to make better margins. Their
clear ambition to be not only an IT provider, but actually a true transformation partner for their clients. Their strategy that they
elaborated back in 2020 was to clearly get a lot of large accounts. That's a conscious decision to focus on less number of accounts,
but be meaningful as a partner in these accounts, be their partner in the transformation and that’s what management is saying. On
quarterly basis they having a moderate number of account and according to management they are focusing of increasing and
expanding their top client relationships and it is in the line with what they are pursuing as a strategy overall.
Academic project – Not a Recommendation

Wipro Ltd

Management Analysis
Leader ship
Below are the detail and Experience of Management
Professionals
Name Designation Qualification
Premji Jr., Rishad Executive Chairman BA in Economics from Wesleyan University and MBA from Harvard Business School. He
Azim Hasham served as Vice-Chairman of National Association of Software and Service Companies from
Apr5, 2017 to Apr10, 2018 He joined Wipro in June 20, 2007 as a Business Manager and
work in many position in Wipro.

Delaporte, Thierry MD, CEO, Director & He holds a Bachelor’s degree in Economy and Finance from Sciences Po Parisa,
Member of Executive Masters in Law from the Paris La Sorbonne University and a Masters in Political
Board Sciences from SciencesPo Paris. He began his career in 1992 as a Senior Auditor
at Arthur Andersen in [Link] joined the Capgemini Group in 1995 working for its
subsidiary Sogeti, as the Group Internal [Link] has held various positions at
Capgemini such as COO and Head of sales for Application service in 2011, CFO
for global outsourcing unit from 2009-2010, CFO for North America from 2005-
2008, CFO of Southern Europe 2003-2005, CFO and COO for Australia and New
Zealand [Link] he was also director of Capagnie.

Aparna [Link] President, CFO & Aparna joined Wipro in 2003 and over the years has held several finance roles, including
Executive Board Member Internal Audit, Business Finance, Finance Planning and Analysis, Corporate Treasury, and
Investor Relations (IR). Most recently, Aparna was Senior Vice President and CFO of Wipro
FullStride [Link] is a Chartered Accountant (CA) and was a gold medalist of the CA
2002 batch.

Bandaru, Nagendra Member fo Executive With over 30 years of global industry experience.20 years at [Link] holds Master of
P. Board & Managing Law (LLM) from Amsterdam Law School, University of Amsterdam with a specialization in
Partner – Wipro international trade law. He also holds a master’s in business administration from TAPMI,
Enterprise Futuring Manipal, a Bachelor of Laws, and Bachelor of Science (physics).

Bruno, Pierre Member fo Executive With over 25 years of experience in IT services and infrastructure [Link] holds a
Board & CEO - Europe Master in Business Administration from HEC, Graduate School, Paris, and a Master’s in
Bioengineering.
Chenchah, Anis Member of Executive Anis has over two decades of experience in Consulting, IT and Business Process
Board & CEO of APMEA [Link] to Wipro, Anis was the CEO of Capgemini Business Services and member of
the Group Executive Committee. He has also held various leadership roles in Capgemini
Financial Services across Europe and the Middle [Link] a Master’s degree in
Engineering from ENSISA in France.

Choudhary, Amit COO & Member of Amit joined Wipro from Capgemini, where he shaped the firm’s strategic direction as
Executive Board Chief Operating Officer for the company’s Financial Services Strategic Business Unit, and
was a member of its Executive Committee. An alumnus of the Indian Institute of
Technology - Kanpur, and the Indian Institute of Management - Calcutta

Dann, Suzanne CEO of Americas 2 With over 25 years of experience in consulting and technology services, Suzanne has held
Strategic Market Unit & multiple leadership positions at both IBM and [Link] joined Wipro in April 2021 as
Executive Board Member the Senior Vice President of Capital Markets and Insurance. Suzanne holds a B.S. degree
in Engineering from Cornell University and a CISSP.

Govil, Saurabh Chief Human Resources Saurabh Govil is the Chief Human Resources Officer at Wipro, and a member of the
Officer & Executive Management [Link] is an alumnus of XLRI, Jamshedpur where he completed his
Board Member master’s in human resources. He is on the advisory board of SHRM India. Saurabh has
been a regular speaker at NASSCOM’s HR summit. He also contributes to NHRDN’s journal
as an [Link] Wipro in May, 2009.
Academic project – Not a Recommendation

Wipro Ltd

Pallia, Srinivas CEO of Americas 1 &

Executive Board Member Srini joined Wipro in [Link] one of India’s top 25 young
business executives by Business Today (2008), Srini holds a bachelor’s
degree in engineering, and a master’s in management studies from
Indian Institute of Science, Bangalore. He graduated from Harvard
Business School’s Leading Global Businesses executive program, and
the Advanced Leadership Program at McGill Executive Institute.
Trautman, Stephanie Chief Growth Officer & more than 30 years of experience developing markets, building high-
Executive Board Member performing teams, and managing global C-Suite client relationships
across [Link] to Wipro, Stephanie worked at Accenture for
seven years

Tatavarti, Subha Chief Technology Officer Prior to Wipro, Stephanie worked at Accenture for seven years, where
she held various leadership positions — most recently as the
Managing Director and Diamond Client Account Lead for one of
Accenture’s 150 global insurance clients. Before Accenture, Stephanie
was a Vice President at CSC (now DXC).Stephanie holds a Master of
Business Administration from Xavier University, Ohio, and a degree in
marketing from the University of Kentucky.

Jo Debecker Executive Board member & Jo holds a master's degree in Finance and Computer Science from The
head of Wipro Full Stride University of Leuven, Belgium. He is fluent in English, Dutch, French,
Cloud and [Link] over two decades of industry experience.

Commentary on Management

After analysing Wipro management I found that every member in executive board is well educated and well skilled in their
respective field and as a research analyst I did not found any red flag or any false practice done by management. Wipro has
also got change in key management his CFO Mr. Jatin Dalal has resigned from position and new Miss. Aparna Iyer will take
his position as the new CFO of Compnay.
Shareholder

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Sep-23

Promoters 73.25% 74.32% 73.85% 74.04% 73.02% 73.00% 72.92% 72.93%
FIIs 10.96% 10.09% 8.93% 8.45% 9.21% 8.12% 6.38% 6.47%
DIIs 5.77% 5.78% 6.50% 7.02% 6.16% 3.24% 8.01% 8.03%
Public 9.45% 9.30% 10.26% 10.09% 11.25% 15.37% 12.51% 12.43%
Others 0.56% 0.51% 0.45% 0.40% 0.35% 0.27% 0.18% 0.14%

Major shareholder 's Quarter ending Sep23

Shareholder's name Total Shares Held Shareholding (%)
Mr. Azim Hasham Premji, Partner representing Zash Traders. 1,08,05,66,791 20.69
Mr. Azim Hasham Premji, Partner representing Prazim Traders. 1,06,56,03,101 20.41
Mr. Azim Hasham Premji, Partner representing Hasham Traders. 88,39,13,365 16.93
Azim Premji Trust. 558,676,017 10.18
LICI ULIP-Growth Fund. 23,97,05,820 4.59
Azim H Premji. 22,58,08,537 4.32
JP Morgan Chase Bank NA. 12,67,11,998 2.43
SBI Long Term Equity Fund. 5,80,37,537 1.11
Azim Premji Philanthropic Initiatives Private Limited. 14,568,663 0.27
Investor Education and Protection Fund (IEPF). 44,31,435 0.08
Academic project – Not a Recommendation

Wipro Ltd

Shareholding

Shareholder havine more than 5% Mar-23 Mar-22

Mr. Azim H. Premji Partner representing Hasham Traders 16.93% 16.95%
Mr. Azim H. Premji Partner representing Prazim Traders 20.41% 20.43%
Mr. Azim H. Premji Partner representing Zash Traders 20.69% 20.72%
Azim Premji Trust 10.18% 10.19%

Commentary on Shareholder & Shareholding

After analysing Wipro Shareholding I found that Promoter have very strong shareholding and in year CY23 they also done
the buyback of share @445. A share buyback of Rs 12,000 crore on July 16, 2023. The buyback was Wipro's biggest in terms
of size. And the biggest shareholder of Wipro is Mr. Azim H. Premji who is also the founder of company. He hold Wipro
share not in directly manner but through his other firm or organization. But Mr. Azim H. Premji disclaims the beneficial
ownership of 558,676,017 shares held by Azim Premji Trust and also disclaims the beneficial ownership of 14,568,663
shares held by Azim Premji Philanthropic Initiatives Private Limited.

Board Members
change in
Remunerat
Remunerati ion from
Name Title Commentray on FY22 (%)
Premji Jr., Rishad Executive Chairman Rishad Azim Hasham Premji's qualifications and background
Azim Hasham certainly played a significant role in his appointment as
Executive Chairman of Wipro Limited. While specific
qualifications and backgrounds can vary widely for individuals
in leadership positions, Mr. Premji's credentials suggest that he
had the relevant experience and skills to assume this role 8.69 cr -43.34%
Delaporte, Thierry MD, CEO, Director & [Link] Delaporte has a diverse and extensive background
Member of Executive in the technology and consulting industry, with significant
Board experience in leadership roles at Capgemini SE prior to his
appointment as MD, CEO & Director at Wipro Limited. His
qualifications and background do provide a strong foundation
for managing a company like Wipro. Here are some aspects of
his background that may be relevant: 91.61 cr 3.26%
Premji, Azim Non-Executive Non-
Hasham Independent Director
& Founder Chairman Founder of Wipro 1.17 cr 2.29%
Satwalekar, Deepak Independent Director Mr. Deepak Madhav Satwalekar has an extensive background
Madhav and a wealth of experience in the finance and corporate
sectors, which can be valuable for serving as an Independent
Director on the board of a company like 1.72 cr 15.48%
Vittal, Ireena Lead Independent Mrs. Ireena Vittal's distinguished background and qualifications
Director make her a standout candidate for the role of Lead
Independent Director at Wipro. Her extensive experience as a
senior advisor, independent director, and her past role as a
Partner at McKinsey & Co. highlight her profound
understanding of business strategy, consumer insights, and
emerging [Link] work in government and public
institutions addressing development issues in India
underscores her expertise in inclusive urban development and
sustainable growth, offering substantial value to Wipro. Her
tenure as an Independent Non-Executive Director at Wipro
since Jul,23,2014, and her appointment as Lead Independent
Director since Jul,1,2021, reflect the trust of the company's
board and shareholders in her qualifications for leadership role. 1.87 cr 16.97%
Academic project – Not a Recommendation

Wipro Ltd

Dupuis, Patrick Independent Non- Mr. Patrick Lucien Andre Dupuis appears to have a strong
Lucien Andre Executive Director background in corporate finance and leadership roles in various
companies, including his experience as a Chief Financial
Officer (CFO) at The Ultimate Software Group, Xoom
Corporation, and PayPal Holdings, Inc. He also has experience
as a CFO at BJC Healthcare and GE Healthcare, among
others. These roles have likely equipped him with a significant
amount of financial and operational expertise.
To become an Independent Non-Executive Director (INED) at a
company like Wipro Ltd., having a background in finance and
leadership is certainly valuable. However, the selection of
INEDs typically involves a more comprehensive evaluation
process that considers various factors, including qualifications,
experience, industry knowledge, and independence. 2.54 cr 7.11%
Ennis Ph.D., Patrick Independent Non- Dr. Patrick J. Ennis has an extensive and diverse background
J. Executive Director that includes experience in technology, venture capital,
innovation, and leadership roles in various organizations. While
his qualifications and background are impressive, 2.55 cr 7.57%
Naidu, Tulsi Independent Ms. Tulsi Ratakonda Naidu's qualifications and background
Ratakonda Director (Joined certainly suggest that she has the necessary expertise and
From 1,July,2021) experience to serve as an Independent Director at Wipro
Limited. Independent Directors are typically appointed to
provide a diverse range of skills and experience to a company's
board, and Ms. Naidu's extensive experience in the financial
services industry, including executive positions at Prudential
and Credit Suisse First Boston Investment Banking, makes her
a valuable addition. 14.49 cr -
Rekonen [Link]., Independent Ms. Paivi Rekonen's qualifications and background appear to
Paivi Director be quite extensive and relevant for serving as an Independent
(1,October,2022) Director at Wipro Limited. Independent Directors are typically
appointed to provide impartial judgment and bring diverse
expertise to the board of directors, ensuring good corporate
governance and strategic guidance for the company. 0.84 cr -

Commentary on Director
After analysing Wipro Director I found that all the director’s are the well educated and well experienced in their field. I did
not find any red flag and any false activity done by any director. But after analysing Wipro director I found in FY23 Wipro
got change in top management and in CY23 Their CFO was also resigned this would be the red flag because Key
Management person has resigned. In FY22 Wipro has seen 2 KMP change. Mr. Naidu and Mr. Rekonen these to Director
are appointed as new independent director of wipro.

Payout in IT sector CEO

Company CEO FY22-23 Salary (In Cr) Revenue in Cr
Wipro Thierry Delaporte 82.4 91766
Infosys Salil Parekh 56.44 152686
Tech Mahindra CP Gurnani 30.14 53741
TCS Ex- CEO Rajesh Gopinathan 29.16 236464
HCL Tech's C Vijaykumar 28.4 106274
Academic project – Not a Recommendation

Wipro Ltd

Quarterly Income statement Snapshot In Cr

FY23Q1 FY23Q2 FY23Q3 FY23Q4 FY24Q1 FY24Q2
Net Revenues 21529 22540 23229 23190 22831 22516
Total Expenditure 17671 18608 18682 18685 18627 18546
EBITDA 3858 3932 4547 4505 4204 3970
EBITDA Margins (%) 17.92% 17.44% 19.57% 19.43% 18.41% 17.63%
Depreciation 774 797 923 847 738 897
Interest 204 227 290 286 309 303
Other Income 472 512 641 646 640 740
Profit Before Tax 3352 3420 3975 4018 3797 3510
Tax 804.48 786.6 914.25 924.14 911.28 842.4
Tax % 24% 23% 23% 23% 24% 24%
Net Profit 2548 2633 3061 3094 2886 2668
Net Profit Margins(%) 11.83% 11.68% 13.18% 13.34% 12.64% 11.85%
EPS 4.68 4.85 5.56 5.60 5.23 4.82
Source: Screener
Annual Income Statement Snapshot In Cr
Particulars FY21 FY22 FY23 FY24 E
Total Revenues 61934.9 79312 90487.6 88810
Growth (%) 15% 28.06% 14.09% -1.85%
COGS 43589.3 60110.5 70040.2 70,255
Other Expenditure 3561.2 2520.2 3596.7 3,561.20
EBITDA 14,784.40 16,681.30 16,850.70 14994
Growth (%) 19.1 12.83% 1.02% -11.02%
Depreciation 2,763 3,078 3,340 3,954.60
Other Income 2,391 2,061 2,266 2784
Net interest expense -509 -533 -1,008 -532.5
PBT 13,902.90 15,132.20 14,768.50 13,290.53
Growth (%) 13.5 8.84% -2.40% -10.01%
PAT before Minority int, 10,866 12,233 13,473 15,072
Minority int. 72 14 15 15
PAT 10,795 12,219 13,459 15,056
TAX 2375 2322 3096 3463
TAX (%) 22% 19% 23% 23%
PBT 8,420 9,897 10,363 11,593
EPS 19.1 22.3 24.5 27.4
EPS (Growth %) 15 17 10 12
Source: Company Analysis
Academic project – Not a Recommendation

Wipro Ltd

Commentary on Income Statement

After Analysing Wipro Income Statement, We can Sales and Sales growth %
understand that Wipro is competing in high Competition
which directly effect their margin and revenue growth. In 100000 28.06% 30%
recent year Wipro has achieve the double digit growth but 25%
most of it was come from Credit Sales and their employee 80000
20%
cost is also rising. which is the main cost in IT industry. For 15% 14.09%
some period of time Wipro selling and admin cost has 60000 15%
increase significantly but in recent year their Selling and 10%
admin cost is decreased. Due to their new business 40000

90487.6
61934.9

79312
operation model cost was decreased significantly. Their Exp 5%

88810
20000
growth is higher than their sales growth and it is not a good 0%
-1.85%
sign for the company. This year for Wipro did not good and 0 -5%
we might see some softness in revenue. FY21 FY22 FY23 FY24 E

Annual Balance sheet Snapshot Total Revenues Growth (%)

Particulars FY21 FY22 FY23 FY24 E

Liabilities
Equity 1,096 1,096 1,096 1,096
Reserves & Surplus 54,214 64,719 67,411 70,422
Networth 55,310 65,816 68,508 71,519
Minority Interest 150 52 66 81
Debt - long term 746 5,646 5,646 5,646
Debt - short term 7,587 9,523 9,523 9,523
Deffered Tax Liability 463 1,214 1,214 1,214
Other liabilities & provisions 3,471 4,367 4,367 4,367
Source of funds 67,727 86,618 89,324 92,350
Assets
Goodwill 13,913 24,699 24,699 24,699
Intangible Assets 1,309 4,356 4,387 4,421
PPE 10,161 10,977 11,391 11,851
[Link] current assets 3,803 3,347 3,347 3,347
Investments 1,204 1,988 1,985 1,983
Debtors 9,866 11,998 15,117 14,949
Cash & Cash equivalents 16,979 10,384 11,298 13,027
Investments - short term 17,977 24,469 24,469 24,469
[Link] assets 7,932 15,701 17,669 19,565
Trade Payable 7,887 9,903 12,558 12,272
OCL & Provisions 7,530 11,397 12,481 13,689
Application of funds 67,727 86,618 89,324 92,350
Academic project – Not a Recommendation

Wipro Ltd

Commentary on Balance Sheet

After Analysing Wipro Balance sheet some points which i

Debtors and Debtor Day's
like to mention:-
• High trade receivable leading the growth and decrease 14,000 80
in debtor day show’s quality debtor. 70
12,000
• Wipro has invested highly in Fixed assets and
Investment on acquisition. 60
10,000
• Debt has increased in recent year but now it is on stable 50
state. 8,000
40
Commentary on Cash Flow Statement 6,000
30
4,000
20
After Analysing Wipro Cash flow sheet some points which i
like to mention:- 2,000 10
• Cash Flow from operation was decrease in % - -
CFO/EBITDA is currently stood at 77% in FY23 and 66%
in FY22.
• Debt has increased in FY22 and investment increased
and we can see it in Cash flow statement. Debtors Debtor Days
• In FY21 we can see significant increase in Dividend and
Buyback.
• And currently Wipro is upgrading its fixed assets that’s
why we seeing high number activity in Pur/Sale of Fixed
Assets.

Annual Cash Flow Statement Snapshot

Particulars FY21 FY22 FY23 FY24 E
PAT before minority int. 10,866 12,233 13,473 15,072
Depreciation 2,766 3,091 3,567 3,955
(inc)/dec in Current Assets 1,352 -5,002 -5,087 -1,728
(inc)/dec in current Liabilities 940 1,353 3,738 922
Taxes paid -2,492 -2,569 -3,690 -4,006
CF from operations 14,755 11,080 13,281 15,705
Other Investments 2,656 -20,508 2,679 2,784
(Purchase)/Sale of Fixed Assets -1,882 -1,942 -4,012 -4,449
CF from investing Activities 774 -22,450 -1,334 -1,665
Inc / (Dec) in Equity Capital 1 1 0 0
Inc / (Dec) in [Link] Funds 621 6,831 0 0
Dividend + Buyback -12,640 -1,200 -11,300 -12,578
CF from Financial Activities -12,884 4,659 -11,300 -12,578
Exchange rate differences -89 128 267 267
Opening cash balance 14,410 16,966 10,383 11,298
Closing cash 16,979 10,383 11,298 13,027
Academic project – Not a Recommendation

Wipro Ltd

Dupont Analysis - Return on Equity & Return on Asset

Return on Equity (ROE)
Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit 8,493.1 8,002.8 9,003.7 9,722.3 10,796.4 12,229.6 11,350.0
Average Shareholder Equity 48,907.5 49,798.3 52,174.5 55,872.2 55,111.4 60,152.0 71,535.5
Return on Equity 17.37% 16.07% 17.26% 17.40% 19.59% 20.33% 15.87%

ROE - Dupont Equation

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit 8,493.1 8,002.8 9,003.7 9,722.3 10,796.4 12,229.6 11,350.0
Revenue 55,448.4 54,487.1 59,018.9 61,137.6 61,934.9 79,312.0 90,487.6
Net Profit Margin (A) 15.32% 14.69% 15.26% 15.90% 17.43% 15.42% 12.54%

Revenue 55,448.4 54,487.1 59,018.9 61,137.6 61,934.9 79,312.0 90,487.6

Average Total Asset 75,131.3 77,031.5 78,988.6 81,793.0 81,782.7 94,920.7 1,12,099.7
Asset Turnover Ratio (B) 0.7x 0.7x 0.7x 0.7x 0.8x 0.8x 0.8x

Average Total Asset 75,131.3 77,031.5 78,988.6 81,793.0 81,782.7 94,920.7 1,12,099.7
Average Shareholder Equity 48,907.5 49,798.3 52,174.5 55,872.2 55,111.4 60,152.0 71,535.5
Equity Multiplier (C) 1.54x 1.55x 1.51x 1.46x 1.48x 1.58x 1.57x

Return on Equity (A*B*C) 17.37% 16.07% 17.26% 17.40% 19.59% 20.33% 15.87%

Return on Asset
Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit 8,493.1 8,002.8 9,003.7 9,722.3 10,796.4 12,229.6 11,350.0
Average Total Asset 75,131.3 77,031.5 78,988.6 81,793.0 81,782.7 94,920.7 1,12,099.7
Return on Asset 11.30% 10.39% 11.40% 11.89% 13.20% 12.88% 10.12%

ROA - Dupont Equation

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit 8,493.1 8,002.8 9,003.7 9,722.3 10,796.4 12,229.6 11,350.0
Revenue 55,448.4 54,487.1 59,018.9 61,137.6 61,934.9 79,312.0 90,487.6
Net Profit Margin (A) 15.32% 14.69% 15.26% 15.90% 17.43% 15.42% 12.54%

Revenue 55,448.4 54,487.1 59,018.9 61,137.6 61,934.9 79,312.0 90,487.6

Average Total Asset 75,131.3 77,031.5 78,988.6 81,793.0 81,782.7 94,920.7 1,12,099.7
Asset Turnover Ratio (B) 0.7x 0.7x 0.7x 0.7x 0.8x 0.8x 0.8x

Return on Asset (A*B) 11.30% 10.39% 11.40% 11.89% 13.20% 12.88% 10.12%
Dupont Summary
• ROE of Wipro is constant range 17.5% to 16% for 2017 to 2020. But due to high demand in 2020-2021 margin
got increased 1.53% and Assets turnover ratio increased by 0.1x and Assets against shareholder equity is
increased by 0.02x due to this ROE increased by 2.19% and in 2022 margin get down by 2.01% but due to Equity
multiplier increase of 0.1x ROE has not seen any big increase only 0.74% increase in ROE. Margin are continue
declining due to this ROE is also decreased.
• ROA of Wipro is also in constant range 10.39% to 11.89% for 2017-2020. Due to increase in margin and increase
in Assets Turnover Ratio their Return on Assets was also increased and due to decline in margin in 2022 we also
see the decrease in Return on Assets and the decrease in margin is continue in 2023 due to this Return on Assets
also decreased.
Academic project – Not a Recommendation

Wipro Ltd

Wipro TCS Infosys HCL tech

Mar-23 Mar-23 Mar-23 Mar-23
Sales 90,488 2,25,458 1,46,767 1,01,456
Expenses 73,640 1,66,199 1,11,637 78,828
Operating Profit 16,848 59,259 35,130 22,628
OPM % 19% 26% 24% 22%
Other Income 2,266 3,449 2,701 1,358
Interest 1,008 779 284 353
Depreciation 3,340 5,022 4,225 414500%
Profit before tax 14,766 56,907 33,322 19,488
Tax % 23% 26% 28% 24%
Net Profit 11,366 42,303 24,108 1484500%
EPS in Rs 20.68 115.19 58.08 54.73
Dividend Payout % 5% 100% 58% 88%

Stock performance (1Y)

27-10-2022 27-12-2022 27-02-2023 27-04-2023 27-06-2023 27-08-2023

TCS Indexed HCL Indexed Infosys Indexed Wipro Nifty 50

Disclaimer : This report is made as part of educational assignment and is meant for educational purpose only. The author
of the report is not liable for any losses due to actions taken basis this report. It is advisable to consult SEBI registered
reasearch analyst before making any investments.