A

PROJECT REPORT
ON
“FUNDAMENTAL ANALYSIS OF SELECTED IT COMPANY”
(WIPRO)
For
“RITIKA SECURITIES, THANE”
IN PARTIAL FULFILLMENT OF THE REQUIREMENT
OF THE AWARD OF THE DEGREE OF
"MASTER OF BUSINESS ADMINISTRATION"
SUBMITTED TO

SAVITRIBAI PHULE PUNE UNIVERSITY

SUBMITTED BY
Monali Narayan Sawant
UNDER THE GUIDANCE OF
PROF. Bhuma Raman
THROUGH

ASM'S INSTITUTE OF BUSINESS MANAGEMENT AND RESEARCH

CHINCHWAD, PUNE-410201

1
 ACKNOWLEDGEMENT

“Success is nourished under the kind of combination of perfect guidance, care and
blessing”

I would like to express my sincere gratitude to my organization guide

Mr.SAMARJEET & Mr.PRASANJEET for the help, guidance and encouragement he
provided throughout this project. This work would have not been possible without his
valuable time, patience and motivation.

I am thankful to Professor. T.Srinivas (Project Guide) for his selfless efforts,

valuable suggestions, guidance & inspiration in all phases of the project work toward the path
of completion.

I would also like to thank my Teachers, Classmates and Friends for the wonderful
time we had together. Despite their busy schedule they patiently helped and gave me valuable
suggestions. It was a great learning experience.

Miss Monali Narayan Sawant

DECLARATION
2
 I, Monali Narayan Sawant, hereby declare that the project titled “Fundamental
Analysis of selected it company” (WIPRO) is an original piece of research work carried out
by me under the guidance and supervision of PROF-T.Srinivas.

The information has been collected from genuine & authentic sources. The work has
been submitted in partial fulfilment of the requirement of master of business Administration
to Savitribai Phule Pune University, Pune.

Place:
Date:
Monali Narayan Sawant

Company Certificate:

3
Table of Content

4
Chapter Content Page
No No

1 Executive Summary 6

2 Objective 8

3 Company Profile 10

4 Theoretical Part 15

4 Literature Review 20

5 Research Methodology 22

6 Data Analysis, Result & Interpretation 26

7 Limitations 41

8 Findings 43

9 Conclusion 45

10 References / Bibliography 47

5
 CHAPTER-1
EXECUTIVE SUMMARY

6
 Chapter 1

Executive Summary

My role in the company is intern and I handle process of Financial Research under the
guidance Mr.SAMARJEET & Mr.PRASANJEET.
Ritika Securities have partnered with LKP Securities Ltd and Narnolia Financial
Advisors Ltd. as sub-broker. Ritika Securities focused on all segment of market
Global IT service providers offer a range of end–to-end software development,
digital services, IT business solutions, research and development services, technology
infrastructure services, business process services, consulting and related support functions.
According to the Strategic Review 2020 published by NASSCOM (the “NASSCOM
Report”), IT export revenues from India grew by 8.1% to an estimated $147 billion in the
fiscal year 2020. India’s global IT industry grew by 7.7% to reach $191 billion during the
year ended March 31, 2020. According to the NASSCOM Report, “Digital” continues to
drive growth (more than 50% of growth in fiscal year 2020) and now contributes $51 billion
to the overall IT industry in India. Technologies such as industrial automation, robotics,
cloud, Internet of Things (“IoT”), augmented reality (“AR”)/virtual reality (“VR”) and
blockchain continues to fuel growth.
Every investor is advised to have enough knowledge about the stock market
before making any investment decisions. Analysis of capital market can be done either by
Fundamental analysis or by Technical analysis. This paper aims to study on Fundamental
analysis of selected IT companies.
Fundamental analysis is studied in three parts. Economic analysis deals with
fundamental factors like GDP, IIP, fiscal deficit, inflation, current account deficit etc.
Industry analysis Indian IT sector is analyzed based on entry barriers, type of industry,
government interference, Porter’s five force model. Finally, Company analysis deals with
various ratios such as dividend payout ratio, EPS, P/E ratio, Debt-Equity ratio are used.

7
CHAPTER-2
OBJECTIVE

8
 Chapter 2
Objective of the study

 To Study the growth & Performance of Wipro LTD.

 To Study on the Fundamental Analysis for Wipro company scrips to recommend for
better choice of investment.
 To make a projection on its business performance
 To Analysis the Book value
 To analyze economy by using some economic indicators like GDP, and inflation rate
etc. for the selected period of 5 years.

9
 CHAPTER 3
COMPANY PROFILE

10
 Chapter 3
Company Profile
1.Wipro Company Profile

Wipro History

Wipro Limited, also known as Western India Products Limited is an Indian

information technology company established by Mohamed Hashem Premji as 'Western
India Vegetable Products Limited' in 1945 which was later abbreviated to Wipro. The
company started off originally as a manufacturer of vegetable ghee/vanaspati, refined edible
oils etc. Gradually the company has diversified into various other businesses.

Today Wipro Limited is the first PCMM Level 5 and SEI CMM Level 5 certified IT
Services Company globally. Wipro provides comprehensive IT solutions and services,
including systems integration, Information Systems outsourcing, package implementation,
software application development and maintenance, and research and development services
to corporations globally.

In the Indian market, Wipro is a leader in providing IT solutions and services for the
corporate segment in India offering system integration, network integration, software
solutions and IT services. Wipro also has profitable presence in niche market segments of
consumer products and lighting. In the Asia Pacific and Middle East markets, Wipro provides
IT solutions and services for global corporations.

Wipro's ADSs are listed on the New York Stock Exchange, and its equity shares are
listed in India on the Stock Exchange – Mumbai, and the National Stock Exchange, among
others.

Wipro is the leading strategic IT partner for companies across India, the Middle East
and Asia–Pacific – offering integrated IT solutions. They plan, deploy, sustain and maintain
your IT lifecycle through their total outsourcing, consulting services, business solutions and

11
professional services. Wipro InfoTech helps you drive momentum in your organisation – no
matter what domain you are in.

Backed by their strong quality processes and rich experience managing global clients
across various business verticals, they align IT strategies to your business goals. Along with
their best of breed technology partners, Wipro InfoTech also helps you with your hardware
and IT infrastructure needs.

Wipro Introduction

Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) is a leading global
information technology, consulting and business process services company. We harness the
power of cognitive computing, hyper-automation, robotics, cloud, analytics and emerging
technologies to help our clients adapt to the digital world and make them successful. A
company recognized globally for its comprehensive portfolio of services, strong commitment
to sustainability and good corporate citizenship, we have over 180,000 dedicated employees
serving clients across six continents. Together, we discover ideas and connect the dots to
build a better and a bold new future. We began our business as a vegetable oil manufacturer
in 1945 at Amalner, a small town in Western India and thereafter, forayed into soaps and
other consumer care products. During the early 1980s, we entered the Indian IT industry by
manufacturing and selling mini computers. In the 1990s, we leveraged our hardware R&D
design and software development expertise and began offering software services to global
clients. In 2013, we demerged the non-IT Diversified Businesses. With a track record of over
25 years in IT Services, we are, today, focused entirely on the global Information Technology
business. Wipro is listed on National Stock Exchange and Bombay Stock Exchange in India
and New York Stock Exchange in the US.

12
 Basic Information of the Company

Company Name Western India Palm Refined Oil Limited

Type Public

Founded 29 December 1945; 74 years ago

Founder Mohamed Premji

Headquarters Sarjapur Road, Bangalore, Karnataka,

India

Area Served Worldwide

Owner Azim Premji (73.85%)
Key people Rishad Premji (Chairman)
Thierry Delaporte (CEO)
Number of employees 175,000 (2020)

Website www.wipro.com

Wipro's Vision

"To earn our clients' trust and maximize the value of their business by providing solutions
that integrate deep industry insights, leading technologies and best in class delivery process."

Headquarters of the company

Bangalore, Karnataka, India

Wipro Tagline

 " Applying thought"

Wipro follow below principles

1. Be passionate about client's success 

13
 2. Be global and responsible
3. Treat each person with respect 
4. Unyielding integrity in everything we do 

SWOT Analysis

Strengths Weaknesses
 
 Effectively using its capital to generate profit -  Decline in Quarterly Net Profit with
RoCE improving in last 2 years falling Profit Margin (YoY)
 Efficient in managing Assets to generate Profits  Declining Net Cash Flow : Companies
- ROA improving since last 2 year not able to generate net cash
 Company with Low Debt  Fall in Quarterly Revenue and Net Profit
 Increasing profits every quarter for the past 2 (YoY)
quarters
 Annual Net Profits improving for last 2 years
 Company with Zero Promoter Pledge
 FII / FPI or Institutions increasing their
shareholding

Opportunities Threats
 Brokers upgraded recommendation or target
price in the past three months
 Positive Breakout Second Resistance
 Highest Recovery from 52 Week Low
 High Volume, High Gain

14
 CHAPTER 4
THEORETICAL PART

15
 Chapter 4
Theoretical Part

What is analysis?
The examination and evaluation of the relevant information to select the best
course of action from among various alternatives. The method used to analyze securities and
make investment decisions fall into two very broad categories: fundamental analysis and
technical analysis. Fundamental analysis involves analyzing the characteristics of a company
in order to estimate its value. Technical analysis takes a completely different approach; it
doesn’t care one hit about the “value” of a company or a commodity. Technicians (sometimes
called chartists) are only interested in the price movement in the market.

What is technical analysis?

Technical analysis is a method of evaluating securities by analyzing the statistics
generated by market activity, such as past prices and volume. Technical analysis does not
attempt to measure a security’s intrinsic value, but instead use charts and other tools to
identify patterns that can suggest future activity.

What is fundamental analysis?

Fundamental Analysis involves examining the economic, Financial & other
qualitative & quantitative factor related to a security in order to determine its intrinsic value.
if a company stock is trading above the intrinsic value or fair value, then the stock is
overvalued. if a company’s stock is trading below the intrinsic value, then the stock is
undervalued. It attempts to study everything that can affect the security’s value. Including
macroeconomic factor (like the overall Economy & Industry conditions) & individually
specifics factor (like the Financial condition & Management of companies).
Fundamental analysis, which is also known as quantitative analysis it’s involves
delving into a company’s or bank financial statement (such as a Profit & Loss Account &
Balance sheet) in order to study various financial indicator (such as a Revenues, Earnings,
Liabilities, Expenses & Assets).

Two Approaches of fundamental analysis:

While carrying out fundamental analysis, investors can use either of the following
approaches:

16
 1. Top-down approach: In this approach, an analyst investigates both international &
national economic indicators, such as GDP growth rates, energy prices, inflation &
interest rate. The search for the best security then trickles down to the analysis of total
sales, price levels & foreign competition in a sector in order to identify thebest
business in the sector.

2. Bottom-up approach: In this approach, an analyst starts the search with specific
businesses, irrespective of their industry/region.

How does fundamental analysis work?

Fundamental analysis is carried out with the aim of predicting the future performance of a
company. It is based on the market price of a security tends to move towards its real value or
intrinsic value. Thus, the intrinsic value of a security being higher than the security’s market
value represents a time to buy. If the value of the security is lower than its market price,
investors should sell it.
Fundamental Analysis Tools
These are the most
Popular tools of fundamental analysis.
Earnings per share-Eps
Price Earnings Ratio-P/E
Price Earning Growth- PEG
Price to Sales-P/s
Price to Book-P/B
Dividend Payout Ratio
Dividend Yield
Book Value
Return on Equity

Financial ratios are tools for interpreting financial statement to provide a basis for valuing
securities and appraising financial and management performance.
A good financial analyst will build in financial ratio calculations extensively in a financial
modeling exercise to enable robust analysis. Financial ratio allow a financial to:
Standardize information from financial statement across multiple financial year to allow
comparison of a firm’s performance over time in financial model.

17
Standardize information from financial statement from different companies to allow apples
comparison between firms of differencing size in financial model.
Measure key relationship by relating inputs (costs) with outputs (benefits) and facilitates
comparison of these relationships over time and across firms in a financial model.

PROS AND CONS OF FUNDAMENTAL ANALYSIS

The advantages of fundamental analysis are

 Very useful for long term investment approach
 Gives a complete view of financial aspects of a company
The disadvantages of fundamental analysis are
 Financial data is required and cannot be analysed by all
 Involves a lengthy and complex process so patience is key

WHY ONLY FUNDAMENTAL ANALYSISI

 Long-term Trends
o Fundamental analysis is good for long-term investments based on long-term
trends, very long-term. The ability to identify and predict long-term economic,
demographic, technological or consumer trends can benefit patient investors
who pick the right industry groups or companies.

 Value Spotting
o fundamental analysis will help identify companies that represent good value.
Some of the most legendary investors think long-term and value. Graham and
Dodd, Warren Buffett and John Neff are seen as the champions of value
investing. Fundamental analysis can help uncover companies with valuable
assets, a strong balance sheet, stable earnings and staying power.

 Business Acumen
o One of the most obvious, but less tangible, rewards of fundamental analysis is
the development of a thorough understanding of the business. After such
painstaking research and analysis, an investor will be familiar with the key
revenue and profit drivers behind a company. Earnings and earnings

18
 expectations can be potent drivers of equity prices. Even some technicians will
agree to that. A good understanding can help investors avoid companies that
are prone to shortfalls and identify those that continue to deliver. In addition to
understanding the business, fundamental analysis allows investors to develop
an understanding of the key value drivers and companies within an industry.
Its industry group heavily influences a stock’s price. By studying these groups,
investors can better position themselves to identify opportunities that are high-
risk (tech), low-risk (utilities), growth oriented (computer), value driven (oil),
non-cyclical (consumer staples), cyclical (transportation) or income oriented
(high yield).

Knowing Who’s Who

Stocks move as a group. By understanding a company’s business, investors can better
position themselves to categorize stocks within the irrelevant industry group. Business can
change rapidly and with it the revenue mix of a company. This happened to many of the pure
internet retailers, which were not really internet companies, but plain retailers. Knowing a
company’s business and being able to place it in a group can make a huge difference in
relative valuations.

Objective of the study

 To analyze economy by using some economic indicators like GDP, and inflation
rate etc. for the selected period of 5 years.
 To analyze the industry especially private IT Industry (Wipro) for the selected
period of 5 Year.
 To carry out Financial and non-financial analysis of Wipro Company as a whole
for the selected period.

19
 CHAPTER 5
LITERATURE REVIEW

20
 Chapter 5
Literature Review

(2016) J Hema and V Ariram in

their research paper titled, “
Fundamental analysis with
special
reference to pharmaceutical
companies listed in NSE” stated
that an investor should analyze
the
market fundamentally and
technically before investing in
shares. They also noticed growth
in the
pharmaceutical industry in India.
• (2009) Hemraj Verma and
Prakash Tiwari in their study
21
headed, “A Fundamental
analysis of public
sector banks in India” detailed
the growth of the Indian banking
industry and current
performance of
the bank with the help of various
ratios
 (2016) J Hema and V Ariram in their research paper titled, “Fundamental analysis
with special reference to pharmaceutical companies listed in NSE” stated that an
investor should analyze the market fundamentally and technically before investing in
shares. They also noticed growth in the pharmaceutical industry in India.

 (2009) Hemraj Verma and Prakash Tiwari in their study headed, “A Fundamental
analysis of public sector banks in India” detailed the growth of the Indian banking
industry and current performance of the bank with the help of various ratios.

 (2011) Sugandharaj kulkarni in his research paper titled, “A study on fundamental

analysis of ONGC” explains about the relevance of fundamental analysis along with
the attempt to find the intrinsic value of shares.

 (2011) Venkatesh C K and Madhu Tyagi in their research paper titled,

“Fundamental analysis as a method of share valuation in comparison with technical
analysis” detailed about different movement of share prices in comparison with
fundamental and technical analysis. It also emphasized on the market capitalization
and organizational structure.

 (2015) Ahmed s Wafi, Hassan Hassan and Abel Mabrouk in their learning headed,
“ Fundamental analysis models in financial market” presented in third economic and
finance conference in Rome. This paper aims to find the better stock valuation model
using the fundamental analysis approach

22
 CHAPTER 6
RESEARCH METHODOLOGY

23
 Chapter 6
Research Methodology

Research Methodology is a way to systematically solve the research problem. It

may be understood as a science of studying how research is done scientifically. It can be
defined as a careful investigation or inquiry especially through search for new facts in any
branch of knowledge”. The objectives of the research could be gaining familiarity with
research objectives to describe the characteristics of a market or many markets as well as of
consumers.

Research can also be defined as:

 Search for knowledge
 Systematic and Scientific search for getting relevant answers on any taken up specific
topic
 Scientific enquiry into a subject.
 Research is a movement from the unknown to the known phenomenon
 It is the voyage of discovery According to Bulmer, Research is primarily committed
to establishing systematic, reliable and valid knowledge about the social world.

The features that a good research procedure must possess are

 Should be systematic in nature.
 Should be logical.
 Should be empirical and replicable in nature.
 Should be according to plans.

24
  Should be according to the rules and the assumptions should not be based on the false
bases or judgement.
 Controlled movement of the research procedure.

Characteristics of Research
 Research is based on the scientific method.
 Helps in answering various pertinent questions.
 It is an organized, planned and patient investigation or a critical enquiry.
 It has logical roots, helping to establish facts or principles.

Limitations of Research
 Problems of collection of data and conceptualization may occur.
 Repetition of problems.
 Outdate and insufficient information system may cause problems.
 Sometimes lack of resources becomes an obstacle.
 Non availability of trained researchers.
 Absence of code of conduct.

Types of Research
 Pure or Basic or Fundamental Research.
 Applied Research.
 Formulative or Exploratory Research.
 descriptive Research or Diagnostic Research.
 Historical Research. Conceptual Research.
 Empirical or Experimental Research.
 One-time Research or Laboratory Research or Situational Research. Conclusion
oriented Research

In this project mainly secondary data is used. Data are collected from the
sources such as internet, websites of selected companies, company balance sheet problem
annual report, economic times etc. Analysis of data is done with help of Fundamental tools
for selected company.

DATA SOURCES

Secondary data has been collected from various sources to analyze the fundamentals.

25
The secondary data has been collected from

 Book
 Internet -websites
 Annual Report

PERIOD OF STUDY

The period of study for the analysis is five year from 2015-16 to 2019-20

TECHNIQUES
The technique used in the analysis of the company is graphs & tables of financial statement
for example balance sheet, profit loss account, cash flow statement, dividend per share, ratio
analysis, valuation ratio etc.

26
 CHAPTER 7
DATA ANALYSIS, RESULT &
INTERPRETATION

27
 Chapter 7
Data Analysis, Result & Interpretation

Economic Analysis
In economic analysis, the present performance of the economy as a whole is
identified using economic factor like GDP, Inflation rate, IIP, Balance of Payment, Fiscal
deficit, current account deficit, Unemployment rate. Table 1 show the five-year data of
economic factor from 2015-16 to 2019-20 which indeed help the investors to take better
investment decision.

Table 1: Table showing economic factors

Year 2015- 2016- 2017- 2018- 2019-

2016 2017 2018 2019 2020

GDP (%) 8.00 8.26 7.04 6.12 5.02

Inflation Rate (%) 5.87 4.94 2.49 4.86 7.66
IIP 3.3 4.6 4.4 3.8 0.7
Fiscal Deficit (%) 3.86 3.49 3.45 3.42 4.6
Current account deficit 1.1 0.6 1.8 2.1 0.9
(%)
Unemployment rate (%) 5.57 5.51 5.42 5.33 5.36

Source: Secondary data

28
 Economic factors
9

0
GDP Inflation Rate IIP Fiscal Deficit Current account Unemployment
deficit Rate

2015-16 2016-17 2017-18 2018-19- 2019-20

Chart 1: Economic factors

Economic growth can be determined using the GDP of the country. GDP is showing
a downwards trend for the past three years it decrease year after year. GDP In Indian
economy Decrease 8.26 to 5.02. As the inflation rate falls down last three year after it
increase the purchasing power of the economy. Increase which boast the market performance.
Inflation in Indian economy is coming down from 5.87 percent in 2015-16 to 2.49 percent in
2017-19, therefore shows a decreasing trend during last three years. After 2018-19 & 2019-
20 Increase respectively 4.86 to 7.66
Industrial productions in an economy establish productivity of the country. Index of
Industrial production initially increased steeply from 2015-16 & 2016-17. In 2017-18 to
2019-20 IIP slightly decreased. Fiscal deficit is surplus of total expenditure over total receipt
exclusive of borrowings during the given fiscal year. Fiscal deficit is having a downward
trend in Indian economy since 2015-16. The highest fiscal deficit is in 2019-20 which is 4.6
percent of GDP.
A current account deficit is the value of investments or services or goods imported
greater than that of the value of exports. The highest current account deficit is identified as on
April 2018-19 which is 2.1 percent. The highest rate of unemployment was in 2015-16 i.e.
5.57 percent and lowest unemployment was in 2018-19 i.e. 5.33 percent.

29
 Industry Analysis

India's IT industry can be divided into six main components, viz. Software
Products, IT services, Engineering and R&D services, ITES/BPO (IT-enabled
services/Business Process Outsourcing), Hardware, and e-commerce. The Indian IT sector
will benefit significantly from the government's schemes like Digital India, Make in India,
and Start Up India. India's highly qualified talent pool of technical graduates is one of the
largest in the world and the country has a low-cost advantage by being 5-6 times inexpensive
than US. India is the second-fastest digitizing economy amongst 17 leading economies of the
world.
Information Technology is fragmented industry and not a concentrated one. In
fragmented industries, there is absence of big dominant players such that small companies
also prevail in the market but it is difficult for one company to establish a vigorous operation.
Information technology industry is a fragmented industry, which emphasis on free entry and
exit of firms into the sector. Even though such a situation prevails in the market, the major
role is played by the big giant corporate like IBM, Infosys, TCS, Inforte, Wipro and others.
Leading Indian IT firms like Infosys, Wipro, TCS and Tech Mahindra, are
diversifying their offerings and showcasing leading ideas in blockchain, artificial intelligence
to clients using innovation hubs, research and development centres, in order to create
differentiated offerings. Increasing competition, pressure on billing rates of traditional
services and increasing commoditization of lower-end services are among the key reasons
forcing the Indian software industry to make a fast move up in the software value chain. The
new digital technologies like social media, mobility, analytics, and cloud computing (SMAC)
has permanently changed the way Indian IT firms do business.

30
 Government can make their interference into the technology sector which has its
own effect in the industry. Government interference and intervention can be explained in two
fundamental parts i.e. directly and indirectly. Direct method means support given by the
government for the development of new technology and market mechanisms to present
incentives for change done by the industry. On the other hand, indirect approach deal with the
persuasion to regulate project standards and direct government purchases by the IT sector.
Porter’s five force models consist of five major indicators to analyze an industry i.e. existing
competition, availability of substitutes, threat of new entrants, bargaining power of suppliers
and bargaining
power of customer
Porter’s five force models consist of five major indicators to analyze an industry
i.e. existing competition, availability of substitutes, threat of new entrants, bargaining power
of suppliers and bargaining power of customers.
• EXISTING COMPETITION: IT services such as network management services, data-
center services, infrastructure management services, application development and
maintenance etc which leads to competition. Many companies in the industry are offering the
similar services and therefore difficult to differentiate each other.
• BARGAINING POWER OF CUSTOMERS: Buyers bargaining power is large and chance
of pressure on rates prevails in the industry. Both the international and Indian IT firms have
negated the advantages all the way through global delivery and mature procurement.
• BARGAINING POWER OF SUPPLIERS: Supplier’s bargaining power is very low and as
high standardization prevails in the industry there is modest chance for the suppliers to have
any thump.
• THREAT OF NEW ENTRANTS: Industry is also characterized by high people dependence
and consequently can observe veterans isolate from prevailing companies to devote in new
ventures. The innovative technology allows the opportunity of entrants to new niche players
which are not dependent on experience constraints or size.
• AVAILABILITY OF SUBSTITUTES: IT sector has been a mixed bag for newer services
as well since internal specialization is low and most of the work is outsourced generally.
Therefore, there is no substantial substitute to information technology industry from internal
perspective, and are thinner in numbers and significance.

31
 Company Analysis

In company analysis the financial performance of the selected companies is

analyzed in order to analyze the profitability of the firm. An investor should be aware of the
financial performance of the company to know the risk and return associated with particular
share. For the purpose of analysis various ratios such as EPS, Book Value, P/E ratio, return
on equity and Dividend payout ratio are used.

 CURRENT RATIO:
This ratio is also known as ‘Working Capital Ratio’ & is used for
determining the short-term financial position of the firm. It is done by matching the
total current assets of the firm with its current liabilities. Following is the formula
used for calculating current ratio:

Current Asset
current Ratio=
Current Liability

Table 1: Table showing current ratio

Year Wipro
2015-2016 2.7
2016-2017 3.52

32
 2017-2018 2.85
2018-2019 2.7
2019-2020 2.7
Source: Secondary Data

Current rati o
4

3.5

2.5

1.5

0.5

0
2015-16 2016-17 2017-18 2018-19 2019-20

Wipro

Chart 2: Current ratio

Interpretation:
 Higher current ratio implies healthier short-term liquidity comfort level.
 A current ratio below 1 indicates that the company may not be able to meet its
obligations in the short run.
 A current ratio of 2:1 is considered satisfactory. The higher the current ratio, the
greater the margin of safety so Wipro’s average current ratio over the last 5 financial
years has been greater than 2 which indicates that the Company has not been facing
liquidity problems to meet its short-term objectives.
 In 2016-17 current assets was the highest which was 3.52. We can see from the graph
the current ratio is fluctuated over the year. In 2016, 2018, 2019and 2020 the Current
ratio of the company almost same.

 QUICK RATIO:
This ratio is also known as ‘Liquid or Acid Test Ratio’. Quick ratio
is used to determine short-term solvency of the firm. This ratio is more precise then
current ratio as it describes the relationship between current liabilities &quick assets.
The quick ratio measures the firm’s ability to meet its current obligations. This ratio
can be calculated as below:

33
 Quick Assets
Quick Ratio=
Current Liability

Table 2: Table showing Quick ratio

Year Wipro
2015-2016 2.03
2016-2017 2.10
2017-2018 1.74
2018-2019 2.17
2019-2020 2.27
Source: Secondary Data

Quick ratio
2.5

1.5

0.5

0
2015-16 2016-17 2017-18 2018-19 2019-20

Wipro

Chart 3: Quick ratio

Interpretation:
 A quick-or-acid-test-ratio of 1:1 is considered to have sufficient liquidity.
 In 2020 highest quick ratio is 2.27. Quick ratio of the company almost same. There is
no big difference between quick and current ratio.
 Consequently, it might be said that, for the most part, a higher quick ratio is best in
light of the fact that it implies more noteworthy liquidity.
 However, a ratio of 4:1 is not good for a business as this implies that the business has
4 times idle current assets against the requirement of 1.

34
 NET PROFIT RATIO:
This ratio is also known as the net profit to sales ratio or net
profit margin & expresses the rate of the net profit for every unit of revenue. The ratio
is calculated by dividing net profit by net sales for the concerned period. It can be
expressed as below:

Net Profit
Net Profit Ratio= × 100
Net Sales

Table 2: Table showing Net Profit

Year Wipro
2015-2016 18.12
2016-2017 17.88
2017-2018 17.27
2018-2019 15.85
2019-2020 17.23
Source: Secondary Data

Net Profit rati o

18.5

18

17.5

17

16.5

16

15.5

15

14.5
2015-16 2016-17 2017-18 2018-19 2019-20

Wipro

Chart 4: Net Profit ratio

35
Interpretation:
 The Net Profit Ratio is 18.12 during the year 2015-16, then it is decrease to 17.88,
17.27 &15.85 respectively year 2016-17, 2017-18 & 2018-19. After 2019-20 it
became 17.23.
 The Net Profit Ratio is the overall measure of the firm’s ability to turn each rupee of
income from services in net profit. If the Net Profit Margin is inadequate the firm will
fail to achieve return on shareholder’s funds.
 The Net Profit is decreased in the year 2018-2019 because the income from services is
decreased.

• EARNINGS PER SHARE:

Earnings per share is computed by dividing profit after interest and preference
dividend by number of equity shareholders. EPS indicates the earning capacity of the
company.
Table 2: Table Showing EPS
Year Wipro
2015-2016 32.97
2016-2017 33.61
2017-2018 16.26
2018-2019 12.67
2019-2020 14.88
Source: Secondary Data

EPS
40

35

30

25

20

15

10

0
2015-16 2016-17 2017-18 2018-19 2019-20

Wipro

Chart 5: EPS

36
Interpretation:
 Earnings Per Share is useful to determine the market price of equity share. It also
shows the business’s ability to pay dividend to his investors.
 In year 2016-17 highest Eps after it decrease 16.26 & 12.67 in year 2017-18 & 2018-
19 then increase by 14.88 in year 2019-20

• PRICE TO EARNINGS RATIO

The P/E Ratio is a measure of the price paid for share relative to income or profit earned by
the firm per
share. A higher P/E ratio means that investors are paying more for unit of income.
• PRICE TO EARNINGS RATIO:
The P/E Ratio is a measure of the price paid for share relative to income or
profit earned by the firm per share. A higher P/E ratio means that investors are paying more
for unit of income. Also, it establishes the relationship between market price of the share &
its earning.

Market Price Per Share

Price Earning Ratio=
Earning Per Equity Share

Table 3: Table Showing P/E ratio

Year Wipro
2015-2016 17.11
2016-2017 15.34
2017-2018 17.29
2018-2019 20.11
2019-2020 13.22
Source: Secondary Data

37
 P/E rati o
25

20

15

10

0
2015-16 2016-17 2017-18 2018-19 2019-20

Wipro

Chart 6: P/E ratio

Interpretation:
 P/E Ratio is very widely used. It helps the investors in deciding whether the shares are
fairly priced or not.
 In 2018-19 P/E Ratio shows that the firm will take longer to recover its market price.
 This ratio is affected by various market factors.
 Price earnings ratio is computed as Market share price by Earnings per share. The
decrease in 2019-20 PE ratio was due to impact of Covid-19 crisis on company share
price.
• RETURN ON EQUITY
Return on equity is a measure of profitability of company that reveals how profit is
generated by the company with the money shareholders have invested. It is computed by
dividing profit after tax with net worth.

Net Profit after Interest ∧Tax

Return on Equity=
shareholde r ' s Fund

Table 4: Table Showing Return on Equity

Year Wipro

38
 2015-2016 19.79
2016-2017 17.47
2017-2018 18.27
2018-2019 15.41
2019-2020 18.68
Source: Secondary Data

Return on Equity
20
18
16
14
12
10
8
6
4
2
0
2015-16 2016-17 2017-18 2018-19 2019-20

Wipro

Chart 7: Return on Equity

Interpretation:
 This Ratio is helpful for making interfirm comparison. It can also be used for
comparing performance over a period of time.
 Return on equity in the year 2015-16 is 4.3 and it increased suddenly to 17.47 in the
year 2016-17 and again it increased to 18.27 in the year 2018-19. Return on Equity of
the company is at dissatisfactory level and then it decreased to 15.41 in 2018-19 and
again increased to 18.68 in 2019-20.

• DIVIDEND PAYOUT RATIO

The DPR measures what a company’s pay out to investors in the form of
dividends. It can be calculated by dividing the annual dividends per share by the Earnings per
share. It can be computed by DPS divided by EPS.

Table 5: Table Showing Dividend Payout Ratio

39
 Year Wipro
2015-2016 30.40
2016-2017 31.48
2017-2018 30.52
2018-2019 26.71
2019-2020 36.17

Source: Secondary Data

Dividend Payout Rati o

40

35

30

25

20

15

10

0
2015-16 2016-17 2017-18 2018-19 2019-20

Wipro

Chart 8: Dividend Payout Ratio

Interpretation:
 Dividend Payout Ratio lets an investor calculate the percentage of the dividend that
the company has decided to distribute out of its net earnings.
 Investors can use the payout ratio metric to decide if a stock is a good investment
given their objectives. Not all firms pay dividends, of course, but some firms that do
pay dividends may not have a secure dividend.
 In 2019-20 Highest Dividend Payout Ratio 36.17.

• BOOK VALUE:
This ratio indicates the share of equity shareholders after the company has
paid all its liabilities, creditors, debenture holders and preference shareholders.
Table 6: Table Showing Book value

40
 Year Wipro
2015-2016 86.88
2016-2017 99.05
2017-2018 98.37
2018-2019 119.04
2019-2020 140.25
Source: Secondary Data

Book value

160

140

120

100

80

60

40

20

0
2015-16 2016-17 2017-18 2018-19 2019-20

Wipro

Chart 9: Book value

Interpretation:
 Book Value of Wipro from 2015-16 to 2019-20 Increase year on year.
 The book value of a business is found by subtracting its total liabilities from its total
assets. Generally, businesses are instead valued at market value, which incorporates
future earnings, intangible assets, and other factors to arrive at an estimated worth.
Jour of Adv. Research in Dynamical and Control Systems

Vol: 9 SI: 5,2017


Special Issue on Allied Electrical and Control Systemsͮ ϵ

• INFOSYS: Intrinsic Value > Market Value, it is undervalued, so it is recommended to
buy the stock as
value of share may increase in future.

41
• TCS: Intrinsic Value > Market Value, it is undervalued, so it is recommended to buy
the stock as value
of share may increase in future.
• HCL TECH: Intrinsic Value < Market Value, it is overvalued, so it is recommended to
sell the stock as
value of share may fall in future.
• MINDTREE: Intrinsic Value < Market Value, it is overvalued, so it is recommended to
sell the stock as
value of share may fall in future.
FIN

42
 CHAPTER 8
LIMITATIONS

43
 Chapter 8
LIMITATIONS

Fundamental analysis has some limitation involved in it. This limitation can be
explained as under:

 Time Constrain:
 Fundamental analysis may offer excellent insights, but it can be
extraordinarily time consuming. Time Consuming models often
produce valuations that are contradictory to the current price prevailing
on the exchange.

 Industry Specific:
 Fundamental analysis has been done under the one industry (IT
SECTOR) and some specific companies.

 Inadequacies of data:
 while making analysis one has to often Wrestle with inadequate data.
while deliberate falsification of data may be rare, Subtle
misrepresentation and concealment are common.

 Future Uncertainties:
 Future changes are largely unpredictable; more so when the economic
and business environment is buffeted by frequent winds of change. In
an environment characterized by discontinuities, the past record in a
poor guide to future performance.

44
CHAPTER 9
FINDINGS

45
 Chapter 9
FINDINGS

 Markets we serve continue to undergo massive disruptions due to the COVID-19

pandemic. The World Bank predicts that the global Gross Domestic Product (“GDP”)
will decline by 5.2% in the year 2020.

 IT export revenues from India grew by 8.1% to an estimated $147 billion in the fiscal
year 2020. India’s global IT industry grew by 7.7% to reach $191 billion during the
year ended March 31, 2020.

 The management of WIPRO is operating the firm very well which is visible through
its current and quick ratio.

 Net profit ratio of wipro increase it helps investors assess if a company's management
is generating enough profit from its sales.
 In FY 2019-20, EPS growth is higher than Net profit growth largely due to reduction
in number of equity shares due to completion of buyback

46
CHAPTER 10
CONCLUSION

47
 Chapter 10
CONCLUSION

Information technology sector of India has been significantly contributed to

the growth of Indian economy in terms of gross domestic products, generation of
employment and foreign exchange earnings. In Indian context, IT sector industries are major
contributors of GDP of India. It is recommended to each investor to have IT sector companies
in their portfolio since they are faster growing industry according to Indian context of
research. In near future it is expected that number of investors will be flooding into the
capital market that increases the relevance of fundamental analysis of various sectors. It can
be concluded that the Information Technology sector companies are one most promising
platform of investment in capital market and in turns give considerable return for the risk
taken by investors.
Wipro is one of the leader company in IT industry and well managed. So for the
long term investor can buy at current price would be best and surely would rewarded in the
form of good returns

48
 CHAPTER 11
REFERENCES/ BIBLIOGRAPHY

49
 Chapter 11
REFERENCES/ BIBLIOGRAPHY

 Fundamental analysis of investor- Raghu Patel

 www.moneycontrol.com
 www.equitymaster.com
 www.wipro.com
 www.rbi.org.in
 Kulkarni Sugandharaj, “A study on fundamental analysis of ONGC”, International
journal of multidisciplinary research, Vol1, Issue 8, Dec 2011 pp 383-392.
 C K Venkatesh and Tyagi Madhu, “ Fundamental analysis as a method of share
valuation in comparison with technical analysis” , Bangladesh research publications
journal, Vol 5, Issue 3, May-June 2011 pp 167-174.
 Wafi S Ahmed Hassan Hassan Mabrouk Adel, “ Fundamental analysis models in
financial markets- Review study”, Procedia economic and finance 30, 2015 pp 939-
947.
 Annual Report of Wipro

50