The stock of Wipro was up by nearly 9% in the morning session. Also, Wipro has announced its Q4 results on Thursday, 15th April 2021. Let’s discuss the quarterly result based on Wipro Stock news announced and also about what are the possible reasons due to which Wipro Stock is going up today.
Wipro Ltd. has announced its Q4FY21 result on Thursday, 15th April 2021. Wipro Stock has been up by nearly 9% on the morning session of the single-day trading session of Friday. Defensive Stocks like IT, FMCG, Pharma, etc., are highly benefited by the rise in the recent rise in Covid-19 cases, as these stocks are now greatly preferred by the Institutional Investors to play defensively.
Revenue growth is just near about 3% YoY, but the same has grown by 4% quarterly. The market is reacting positively to this sequential growth in revenue of the company.
The Operating Profit Margin (OPM) of the company has grown by 3.44% YoY and is at 21% in Q4FY21. OPM was 17.56% in Q4FY20. The important thing to notice here is TCS and Infosys are having higher OPM than Wipro, which is 25.9% and 24.5%, respectively, in the Q4FY21.
Of the Consolidated business of Wipro, the company has reported growth of 27.77% YoY in its Net Profit in Q4FY21.
Talking about Attrition rates of employees, TCS currently has an impressive attrition rate in single-digit i.e., 7%; Infosys is having an attrition rate of 15%, and this is one of the reasons behind the premium valuation of TCS.
The company has presented a big Operating Cash Flow of Rs. 14,760 Cr. in FY21, with an increase of 46.6% YoY.
This Operating Cash Flow (OCF) of the company accounts for 136.6% of the Net Income.
Total Net Income of the company for FY21 is Rs. 10,790 Cr.
Wipro is currently trading at a PE ratio of 23-25.
PE ratio might also increase as the Earnings of the company have increased by 27.77% YoY.
1- Year Average PE of the company is around 20. While the 3-Year Average PE ratio of Wipro is 17, and the 5-Year median PE Ratio is 15.73.
Looking at the historical valuation of PE ratio of 1-Year, 3-Year, and 5-Year Average PE, Wipro is currently trading at a premium valuation.
Firstly, all the IT Stocks are trading at Premium Valuation.
Institutional Investors are shifting towards Defensive Sectors with the rise in Covid-19 cases.
Great deals in the pipeline, Increase in EPS, Increase in Net Profit, and Optimistic Factors are also playing out well for the company.
Currently, all the stocks in the IT sector, including Wipro, are trading at a premium valuation. Wipro has presented a significant growth in revenue, Net Profit, and Operating Cash Flow in Q4FY21. As of now, positivity in the IT sector, optimistic vision of the company, strong deals in bags, and decent Q4FY21 results are working quite favorably for the company. Also, from a valuation point of view, the company is currently trading at a premium valuation in comparison to its historical averages.
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