WIPRO.NS · NSI · Technology
Wipro Limited
Also onConsensus Drift
Implied value per share
INR 147.04
Market price
INR 166.83
Implied upside
-11.9%
5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case
Value Per Share
Same forecast, different terminal treatment. Percentages vs price.
Forecast Cashflows
Reporting currency (INR). Outflows negative.
| Line | FY27 | FY28 | FY29 | FY30 | FY31 | CAGR |
|---|---|---|---|---|---|---|
| Revenue | INR 933.5bn | INR 940.8bn | INR 948.1bn | INR 955.5bn | INR 963.0bn | +0.8% |
| EBIT | INR 147.2bn | INR 148.3bn | INR 149.5bn | INR 150.7bn | INR 151.8bn | +0.8% |
| NOPAT | INR 111.9bn | INR 112.8bn | INR 113.7bn | INR 114.5bn | INR 115.4bn | +0.8% |
| Add depreciation & amortisation | INR 32.6bn | INR 32.8bn | INR 33.1bn | INR 33.3bn | INR 33.6bn | +0.8% |
| Less capital expenditure | INR -14.4bn | INR -14.5bn | INR -14.7bn | INR -14.8bn | INR -14.9bn | +0.8% |
| Less increase in working capital | INR -7.2bn | INR -7.3bn | INR -7.3bn | INR -7.4bn | INR -7.5bn | +0.8% |
| Free cashflow to firm | INR 122.8bn | INR 123.7bn | INR 124.7bn | INR 125.7bn | INR 126.7bn | +0.8% |
| Discount factor | 0.9498 | 0.8569 | 0.7730 | 0.6973 | 0.6291 | - |
| Present value | INR 116.6bn | INR 106.0bn | INR 96.4bn | INR 87.6bn | INR 79.7bn | -9.1% |
| Present Value Of The Forecast | INR 486.4bn | |||||
Discount Rate
Source shown per component. All overridable above.
| Risk-free rate | 6.80% | INR assumption - no free live source available for this market (assumption) |
| Equity risk premium | 8.00% | Market assumption |
| Beta | 0.593 | Reported 0.393, pulled toward 1.0 (Blume) |
| Cost of equity | 11.55% | Risk-free + beta x equity risk premium |
| Cost of debt | 6.80% | Floored at the risk-free rate (implied cost of debt was lower) |
| Market capitalisation | INR 1650.5bn | 89.1% of capital |
| Total debt | INR 202.9bn | 10.9% of capital, book value as a proxy |
| Tax rate | 24.0% | Effective, capped at statutory |
| WACC | 10.85% | E/V x Re + D/V x Rd x (1 - t) |
Terminal Value
Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.
Perpetuity growth at 2.50%
59% of EV
- Forecast FCFF, final year
- INR 126.7bn
- Capex at depreciation, working capital in reinvestment
- INR 118.6bn
- Less reinvestment at g/ROIC (22.1% of NOPAT)
- INR -26.2bn
- Capitalised
- INR 92.4bn
- ROIC (reported)
- 11.3%
- Terminal value, undiscounted
- INR 1134.0bn
- Terminal value, discounted
- INR 713.4bn
- Enterprise value
- INR 1199.8bn
- Less net debt
- INR -340.7bn
- Equity value
- INR 1540.5bn
Exit at 7.3x EBITDA
64% of EV
- Terminal value, undiscounted
- INR 1362.6bn
- Terminal value, discounted
- INR 857.2bn
- Enterprise value
- INR 1343.6bn
- Less net debt
- INR -340.7bn
- Equity value
- INR 1684.3bn
Spread between methods: 9%.
Sensitivity
Value per share (INR) by discount rate and long-run growth.
| Long-run growth | |||||
|---|---|---|---|---|---|
| Discount rate | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
| 8.85% | 173.56 | 175.71 | 178.15 | 180.95 | 184.22 |
| 9.85% | 158.15 | 159.28 | 160.52 | 161.89 | 163.42 |
| 10.85% | 146.01 | 146.52 | 147.04 | 147.60 | 148.19 |
| 11.85% | 136.59 | 136.88 | 137.17 | 137.46 | 137.75 |
| 12.85% | 129.00 | 129.25 | 129.51 | 129.76 | 130.02 |
Outlined: this model. Green text: above today's price of 166.83. Shading: distance from this model's own value.
Priced In
What each input would have to be to justify the current price, one at a time.
| Input | Model | Implied | Gap |
|---|---|---|---|
| Revenue growth, every year | 0.8% | 13.9% | +13.1pp |
| EBIT margin | 15.8% | 18.6% | +2.9pp |
| Discount rate | 10.8% | 9.5% | -1.4pp |
Live formulas, not pasted numbers - edit a driver and the workbook reprices.
Yahoo Finance and RBA data. General information, not advice. Methodology.