X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Wipro: Organic growth - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Apr 17, 2002

    Wipro: Organic growth

    Wipro plans to grow organically, literally speaking. The company now plans to tap the bio-informatics markets for future growth. The company recently announced the formation of new business segment, Wipro Healthcare and Life Science. The new business unit will address the requirements of the bio-informatics market, which is estimated to be around US$ 25 bn (Rs 1,252 bn). The market is expected to grow at about 20% annually.

    In the year 2000 by mapping of the human genome, scientists broke the human genome down into a digital code of 3.1 billion chemical bases. Bioinformatics is a scientific discipline that deals with all aspects of biological information - acquisition, processing, storage, distribution, analysis and interpretation.

    Now that biological information, more importantly genetic information, is understood and stored in a digital form, it can be manipulated with the processing power of computers to understand the genes, their effects and more importantly, how these effects can be altered to suit mankind. This calls for combining the tools and techniques of biology, chemistry, computer sciences, information technology and mathematics. This is where the IT services companies come in.
    The Applications
    Database query tools.
    Sequence analysis & Molecular evolution.
    Genome mapping & comparison.
    Gene Identification.
    Structure Prediction.
    Molecular Modeling & Simulation.

    Coming to the possibilities in business, the first application could be medicine. Deeper understanding of diseases using bio-informatics would help to eradicate the diseases. But after this, the possibilities are limitless right from designer babies to personalised medicine to clones. Trillions of dollars are for the taking.

    However, Wipro’s new business unit will not limit itself to providing bio-informatics solutions to life science companies. The division also plans to offer solutions to hospitals and health insurance companies and IT solutions to medical and analytical devices companies. Healthcare has been the vertical IT services companies have been looking at for growth lately. Infosys recently bagged a project from The National Health Services (NHS) UK. (Read more).

    Wipro is the latest to join the bioinformatics bandwagon. Satyam is already in a tie up with Center For Cellular and Molecular Biology (CCMB) and TCS has expressed interest to tap the emerging business potential from bio-informatics. Wipro has an added advantage in terms of its relationship with companies like GE Medical Systems.

    At the current market price of Rs 1,780, the stock is trading at a P/E multiple of 52x its FY02 estimated earnings. We expected Wipro’s book value to be Rs 118 at the close of fiscal 02. Thus, significant growth expectations have been factored into the stock price. However, considering the fact that US economy expected to turn around in the near future, Wipro will as usual, lead the pack when the prospects for the sector brighten. The stock for the past 52-week has traded in a P/E band of 26x to 52x (Rs 815 to Rs 1,985). Thus, the element of risk is very high.

     

     

    Equitymaster requests your view! Post a comment on "Wipro: Organic growth". Click here!

      
     

    More Views on News

    Wipro: A Decent Start to the Year (Quarterly Results Update - Detailed)

    Jul 27, 2017

    Digital services drive growth for Wipro in 1QFY18.

    Wipro: A Good Performance (Quarterly Results Update - Detailed)

    May 4, 2017

    Acquisitions and digital services aid growth.

    Wipro: Another Flat Quarter (Quarterly Results Update - Detailed)

    Feb 9, 2017

    Wipro has reported a 1% QoQ decrease in the consolidated topline and a 1.9% QoQ increase in the consolidated bottomline for the quarter ended December 2016.

    Tech Mahindra: Our Revised View (Quarterly Results Update - Detailed)

    Aug 2, 2017

    A better than expected turnaround in performance results in a change in view.

    Infosys: A Decent Start to FY18 (Quarterly Results Update - Detailed)

    Jul 14, 2017

    Infosys starts FY18 on an encouraging note with a stable performance.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    WIPRO SHARE PRICE


    Aug 18, 2017 (Close)

    TRACK WIPRO

    WIPRO 8-QTR ANALYSIS

    Detailed Quarterly Results With Charts

    COMPARE WIPRO WITH

    MARKET STATS