🟢 At a Glance
Wipro has spent 5 years stuck in fourth gear. While TCS and Infosys rev their growth engines, Wipro’s been caught idling — slashing margins, confusing investors with CEO shuffles, and burning cash on buybacks like it’s Diwali. But can this IT underdog finally debug its future?
🔎 1. TL;DR – What Just Happened?
- 🐢 Sales CAGR (FY20–25): ~8% (slowest among Tier-1 IT players)
- 📉 Profit CAGR: 6%, despite billions in buybacks
- 💸 Free Cash Flow FY25: ₹16,943 Cr (very solid)
- 💰 Dividend Yield: 2.3% with a 48% payout ratio in FY25
- 🔁 CEO Turnover: Like a corporate version of Indian Idol
- ⚙️ Fair Value Range: ₹285–₹325 (explained below)
- 🧠 Key Question: Is the turnaround signal real or just another PowerPoint promise?
🧪 2. Financial Checkup: Slower Than Infosys’ HR Email Replies
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 61,935 | 79,312 | 90,488 | 89,760 | 89,088 |
| Growth (%) | 1.3% | 28% | 14.1% | -0.8% | -0.7% |
| EBITDA (₹ Cr) | 14,771 | 16,684 | 16,839 | 16,752 | 18,021 |
| EBITDA Margin (%) | 24% | 21% | 19% | 19% | 20% |
| Net Profit (₹ Cr) | 10,868 | 12,243 | 11,366 | 11,112 | 13,218 |
| EPS (₹) | 9.85 | 11.15 | 10.34 | 10.57 | 12.54 |
🔍 FY25 finally saw earnings momentum return thanks to a steady OPM uptick and 20% net profit growth, but the topline has been de-growing for 2 straight years. Not sexy.
💼 3. Business Mix – IT Services with a Side of Existential Crisis
- 🔁 Core Focus: Application services, infra, cloud, BPO
- 🌍 Geographic Mix: US & Europe dominate (>75%)
- 🧾 Client Retention: Decent, but growth muted in BFSI and Healthcare verticals
- 🔧 Major Issues: Sluggish order inflow, over-dependence on consulting and cost-takeout deals, weak traction in AI vs peers
📉 4. Quarterly Drama – Flat is the New Volatile
| Quarter | Revenue (₹ Cr) | OPM % | Net Profit (₹ Cr) |
|---|---|---|---|
| Mar 2023 | 23,190 | 19% | 3,094 |
| Mar 2024 | 22,208 | 20% | 2,858 |
| Mar 2025 | 22,504 | 21% | 3,588 |
➡️ Margins are recovering slowly. Net profit growth of ~26% YoY in Mar’25 was the highlight. But revenue is stuck in the same range since FY22.
🧾 5. Balance Sheet – The Only Thing Growing Faster Than Buybacks
- 🏦 Reserves: ₹80,736 Cr
- 💸 Debt: ₹19,204 Cr (manageable)
- 💼 Cash & Inv.: ₹43,926 Cr
- 💰 Dividend: 48% payout in FY25
- 📉 Buybacks: Repeated — but haven’t helped rerate the stock
👥 6. Shareholding & Management – Promoters Steady, FIIs Back In
| Shareholder | Sep ’22 | Mar ’24 | Jun ’25 |
|---|---|---|---|
| Promoters | 72.96% | 72.73% | 72.67% |
| FIIs | 6.58% | 8.35% | 10.85% |
| DIIs | 7.96% | 7.47% | 7.75% |
| Public | 12.29% | 11.31% | 8.62% |
🧐 FII holding is rising — maybe they see something we don’t (or just betting on a sector rerating).
🥊 7. Peer Roast – Who’s Got the Best Punch?
| Company | PE | ROCE (%) | Div Yield | 1-Yr Profit Growth |
|---|---|---|---|---|
| TCS | 25.5 | 64.6 | 1.75% | -1.7% |
| Infosys | 25.3 | 37.5 | 2.66% | -11.7% |
| HCL Tech | 26.7 | 31.9 | 3.15% | 8.1% |
| Wipro | 21.3 | 19.5 | 2.26% | 25.9% |
| TechM | 38.8 | 20.1 | 2.67% | 72.7% |
| Persistent Sys | 65.9 | 31.4 | 0.44% | 25.5% |
🟩 Verdict: Wipro is cheaper than peers (lowest P/E), but for a reason — it has the lowest ROCE and historically underwhelming execution.
🔮 Fair Value Calculation – Worth Rebooting?
Let’s be generous and assume:
- EPS FY26E = ₹14
- P/E Range = 20x (bearish) to 23x (base case)
🧮
- FV (Low) = ₹14 × 20 = ₹280
- FV (Base) = ₹14 × 23 = ₹322
- Current Price = ₹266
🟢 Fair Value Range = ₹280–₹322
⚠️ Undervalued only if execution actually improves… for once.
🧠 EduTake – Ctrl + Alt + Execution
- 📉 Despite record cash flows and earnings, the stock trades like it’s still being punished for the 2008 financial crisis.
- 🛠️ If new CEO Srini Pallia can execute (and not just restructure), Wipro could unlock value fast.
- 📢 But let’s be honest — Wipro’s real risk isn’t macro. It’s mid-management inertia and a decade-long brand erosion in tech.
⚙️ Final Diagnosis
Wipro is not a fraud. It’s just… unsexy.
And in an AI-driven tech world, unsexy doesn’t get priced premium.
But if it sustains 20% margins, grows profits 10–12%, and avoids yet another CEO musical chair episode — this ₹266 stock could deliver slow and steady 12–15% CAGR returns.
Just don’t expect fireworks. Expect Wi-Fi level returns: spotty, but gets the job done.
✍️ Written by Prashant | 📅 June 20, 2025
Tags: Wipro, IT Stocks, Nifty50, Tier-1 IT, Srini Pallia, Buyback Strategy, Indian Tech Stocks, EduInvesting
