Wipro Limited (ADR) (WIT)

I have extensive business/technical experience with the Indian outsourcers, specifically Wipro, Infosys, Tata Consulting and several other smaller firms. Happily, never with Satyam, however. My opinion is that Wipro is by far the best. As their customer, they always came through for me, always were very competitive in price and in all cases I was involved in, demonstrated considerably greater technical breadth and depth than their competitiors.

The way they run their business is excellent as well. In my key measurements, TTM ROIC was 24% in 2007, down slightly from their 5 year average of 28%. Debt to equity is 40, higher than I like but well below my redline of 50. Average growth (5 year average) is 18%. Revenue has steadily increased over the last 5 years and the last 5 quarters. Last reported quarter was up 36% year over year. Profits have not been quite as robust but still positive right through this economic mess. A final key metric is retained earnings, always growing positively and tracking revenues. On a valuation basis, I have current fair value of $9.60 and a 5 year target of $16. PEG is about .085. In terms of historical pricing, I have the mean PE at about 25 with the current TTM at 17.6 and the forward PE at 13.5.