Here's a fun fact for all the proponents of buying 'Quality companies at any price':
Wipro is a 'Quality Company' and a part of Nifty 50 for most part of the last 20 years
Between 2000-2021, Sales went up 22x while profits went up 33x
Stock returns were basically almost ZERO
More from Valuation
When we put a high multiple to sales, the most important thing to worry about is - what could disrupt those cash flows. A lower multiple to sales (like a 1x or 2x) justifies Yo-Yo cyclicality and 10x sales implies relatively stable gross margins, cash flow and business economics.
It's amazing \U0001f60a 25% NP
— Avinash (@Aviral_Bharat) February 17, 2022
$8b revenue
$2b Profit
$92b MCap
At 11 times revenue, it seems to be cheap compared to\U0001f609