Wipro stock : Wipro Ltd reported better-than-expected December quarter earnings, with IT Services revenue and Ebitda exceeding Street expectations. Analysts reported that Wipro’s margin reached a three-year high, and management met guidance for the second consecutive quarter. While the IT major’s deal wins were modest, they were consistent with expectations. However, other experts say the stock is adequately priced and that the counter’s upside is limited.
According to Nirmal Bang Institutional Equities, while Wipro performed well in a seasonally bad quarter, the company is concerned about the sustainability of this increase because the Energy, Manufacturing, and Resources, and Technology verticals are weak, with some early signs of recovery.
Wipro stock performance
What it appreciated about Wipro’s Q3 performance was the major deal momentum (17 in Q3FY25), top account growth (up 8.5% QoQ), second consecutive quarter of meeting expectations, and three-year high margins.
“But Wipro today has: a) a significant reliance on top client growth, b) poor deal conversion in Europe, and c) leadership development in APMEA. To account for these factors from the 3QFY25 results, we increased our forecasts for EBIT for FY26/27 by 40/50 basis points and EPS for FY26/27 by 1.1% each. However, we cut our revenue projections by 4.3% each for FY26/27E to account for Wipro-specific challenges. We continue our HOLD rating on Wipro and maintain a valuation multiple of 21.3 times on Dec 2026 EPS of 14.4/share to achieve the target price of Rs 306,” it stated.
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The IT giant last week reported a 24.48 percent year-on-year (YoY) increase in its consolidated net profit for the December quarter to Rs 3,353.8 crore, up from Rs 2,694.2 crore the previous year. Revenue from operations increased by 0.51 percent to Rs 22,318.8 crore in Q3 FY25, up from Rs 22,205.1 crore in the same period last fiscal year. The IT services operating margin for the quarter was 17.5%.
MOFSL reported that growth was particularly high in the US BFSI and Healthcare verticals, which were fuelled by a modest recovery in discretionary expenditure. The company’s emphasis on client mining and increasing its consultancy business has bolstered its deal pipeline, particularly in the Americas, it claims.
“However, obstacles persist in some verticals and areas. Its fourth-quarter guidance is subdued (-1 percent to 1% in CC), citing geographical difficulties, particularly in Europe and APMEA. The manufacturing and E&U verticals continue to experience client-specific headwinds, with no quick indications of recovery envisaged,” it stated, suggesting a ‘Neutral’ rating and a target price of Rs 290 for the company.
According to Nuvama Institutional Equities, Wipro’s results are consistent with its recent upgrade thesis, which was based on the company’s favourable portfolio mix and solid margin performance. It raised its FY25 and FY26 earnings expectations by 2-5 percent due to better margins. The broking maintained a ‘Buy’ rating on Wipro shares with an unchanged target price of Rs 350.
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