Wipro: A remarkable business
Wipro is a compelling opportunity for investors who are seeking exposure to the growing technology industry.
Contributed by India analyst and investor Bhaumil Patel.
Wipro Limited is a leading information technology and consulting company with a strong presence in India and a growing footprint worldwide. With a diversified range of services, Wipro is well-positioned to benefit from the increasing demand for technology solutions across various industries.
Wipro’s IT Services segment offers a wide range of IT and IT-enabled services, including digital strategy advisory, custom application design and development, systems integration, cloud and infrastructure services, and analytics. With its customer-centric design approach, Wipro is well-positioned to help enterprises across various sectors enhance their operations and achieve their digital transformation goals. The company’s strong focus on R&D and innovation enables it to stay ahead of the competition and offer cutting-edge solutions to its clients.
In addition to its IT services, Wipro also has a strong presence in the IT Products segment. The company offers a range of third-party IT products, including enterprise platforms, networking solutions, software and data storage products, and contact center infrastructure. With its end-to-end solutions and expertise in IT optimization technologies, Wipro is well-positioned to help clients optimize their operations and achieve better business outcomes.
Wipro’s India State Run Enterprise Services (ISRE) segment offers IT services to entities and departments owned or controlled by the Government of India and/or various Indian State Governments. This segment provides a stable source of revenue and helps diversify Wipro’s revenue streams. In addition, Wipro’s cybersecurity consulting services offer a unique value proposition to clients who are increasingly concerned about cybersecurity threats.
Interesting facts
Here are some interesting historical facts about Wipro:
Wipro was founded in 1945 in Amalner, Maharashtra, by M.H. Hasham Premji. Initially, the company was called Western India Palm Refined Oil Limited and was in the business of producing vegetable and refined oils.
In the 1960s, Wipro diversified into the manufacturing of soaps, lighting products, and hydraulic cylinders. Later, in the 1980s, the company entered the IT industry by manufacturing and selling computer hardware.
In 1985, Wipro started its software development division and began providing software development services to clients in the United States.
In the 1990s, Wipro expanded its business globally by acquiring several companies in the US, Europe, and Asia. The company also became one of the largest software exporters in India during this time.
In 2000, Wipro became the first software company in India to receive the ISO 14001 certification for its environmentally friendly practices.
In 2013, Wipro became the first Indian IT company to receive the Global Water Award for its water conservation and management initiatives.
In 2016, Wipro announced the acquisition of Appirio, a global cloud services company, to expand its cloud services offerings.
In 2020, Wipro announced that it would acquire Capco, a global management and technology consultancy, for $1.45 billion to strengthen its capabilities in the financial services sector.
Overall, Wipro has a long and interesting history of innovation and diversification, and the company continues to evolve and adapt to meet the changing needs of the market.
Attractive valuation
One of the key advantages of investing in Wipro is its attractive valuation. With a price-to-earnings ratio (P/E) of 18.8x, Wipro’s valuation is below the industry’s P/E of 24.7x. A lower P/E ratio than the industry average indicates that Wipro is undervalued compared to its peers.
Furthermore, earnings are forecast to grow at a rate of 11.6% per year over the next three to five years. This growth outlook, combined with Wipro’s strong market position and diversified service offerings, make it an attractive investment opportunity.
Conclusion
In summary, Wipro is a leading information technology and consulting company with a diversified range of services and a strong presence in India and globally. With its customer-centric design approach, strong focus on R&D and innovation, and expertise in IT optimization technologies, Wipro is well-positioned to benefit from the growing demand for technology solutions across various industries. Its attractive valuation and strong growth outlook make it a compelling investment opportunity for investors seeking exposure to the technology industry.
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