Brokerages have downgraded their ratings on Wipro and lowered their price targets after the IT services provider reported weaker-than-expected revenue for the March quarter and issued a muted revenue outlook for the first quarter of FY26, citing macroeconomic uncertainties and client caution.
Nuvama Institutional Equities downgraded Wipro to ‘Hold’ and cut its target price to `260 from `300. The brokerage said: “With the rapid deterioration of macro, leading to uncertainty around discretionary spends and Wipro’s valuation becoming similar to peers TCS, Infosys and HCLTech – the brokerage does not see either of the two premises holding up any longer.”
Motilal Oswal Financial Services reiterated its ‘Sell’ rating on Wipro with a target price of Rs 215, noting that “Q1 guidance reflects temporary freeze on client budgets: As per the management, client spends deteriorated toward the end of Q4, and Q1 could see further impact.”
Shares of Wipro fell over 5% intraday on Thursday on the National Stock Exchange to close at `237.40.
Emkay Global also maintained a ‘Reduce’ rating, cutting its target price to `260. “The company experienced cautious client behavior, evidenced in the pause of a few programs, delay in ramp ups, and some instances of ramp downs amid elevated macro uncertainty with US tariff announcements,” it said. The brokerage also observed that “macro and geopolitical uncertainty remains at elevated levels leading to low predictability in the short run.”
Elara Capital echoed the concerns, stating, “Q1FY26 guidance continues to be weak. The guidance has factored in uncertainty related to tariff related announcement, as a result of which clients are taking a cautious approach to tech spending in the near term.” Elara also lowered its target price to `210 from `250 and maintained a ‘Sell’ recommendation.
Despite some sequential improvements in select verticals, Wipro’s fourth-quarter numbers were subdued. The consolidated revenue of the company rose 0.8% quarter-on-quarter to Rs 22,504.2 crore, and was below the analysts’ expectation of Rs 22,684 crore as pegged by Bloomberg. The company projected a revenue growth guidance for Q1 FY26 at (-) 3.5% to (-) 1.5%, which is lower than what was pegged for Q4 at (-) 1% to 1%.
Wipro’s deal intake for the quarter stood at approximately $3.9 billion, up 12.5% quarter-on-quarter. This included large-deal bookings worth $1.8 billion. However, several brokerages raised concerns about deal-to-revenue conversion.
Motilal Oswal said: “Deal TCV was strong, but this has been the case over FY24-25, potential leakage and deferrals could lead to lower conversion.” It added that while Wipro has performed “admirably on margins,” at 17.5%, “we believe we are at the upper end of the range and further gains could be limited.”
As Elara Capital summed up, “We continue to recommend SELL on the stock given: weak Q1 guidance, FY26 likely to be the third consecutive year of revenue decline, no material margin improvement levers ahead and 36% of the exposure to industries, which will have a direct bearing on tariff-related impact.”
The company’s revenue contribution from its largest vertical, BFSI, rose 10 bps quarter-on-quarter in the March quarter. Meanwhile, those of the consumer sector fell 10 bps. And, revenue from its energy, manufacturing and resources rose 40 bps sequentially. Meanwhile, sales contribution from technology and communication and health fell 10 bps and 30 bps, respectively.