Wipro shares declined 2.3% to ₹175.60 on Friday after reporting mixed Q1FY27 results. The IT services player posted consolidated net profit of ₹3,352 crore, representing a 0.6% year-on-year growth compared with ₹3,330 crore in the last year period. Revenue from operations rose 10.6% YoY to ₹24,479 crore in the first quarter, up from ₹22,135 crore in the previous year quarter. However, the company maintained a cautious outlook for the September quarter, guiding for IT services revenue to range between a 1.5% decline and a 0.5% increase in constant currency terms.
ICICI Securities has recommended a reduce rating on Wipro with a target price of ₹153, significantly lower than its earlier target of ₹165, in its research report dated July 17, 2026. The brokerage noted that Wipro's Q1FY27 performance was broadly in line with revenue estimates, with IT Services revenue declining 1.2% QoQ in constant currency against their estimate of -1.3%. However, EBIT margin at 16.0% missed their estimate of 16.7% due to the combined impact of wage hikes, large deal ramp-up costs and continued investments in AI capabilities. ICICI Securities cut its EPS estimates by ~2.5% for FY27-28E, largely due to the reduced revenue projections. The brokerage expects AI to expand the addressable market and acknowledges that clients are increasingly reallocating discretionary budgets from traditional IT toward AI, governance & compliance initiatives.
The company's Q2FY27 revenue guidance of -1.5% to +0.5% QoQ in constant currency was slightly below expectations, with management attributing the cautious outlook to macroeconomic uncertainty and geopolitical instability. For the September quarter, Wipro expects IT services revenue in the range of $2.574 billion to $2.627 billion, implying constant currency growth of -1.5% to +0.5% sequentially. The weak guidance reflects concerns about deal ramp-up delays, especially in BFSI sector, and soft discretionary spends. Despite TCV wins of $3.4 billion, the company's constant currency revenue growth is projected to be flat to slightly negative due to slower deal ramp-ups and uneven recovery across verticals. Elara Capital expects weak performance in BFSI, consumer and energy segments to continue through FY27 and now forecasts a 1% decline in US dollar revenue for both FY27 and FY28.
India's defence sector is predicted to experience an 11% CAGR in capital expenditure through FY2030, driven by increases in domestic procurement and AoN approvals. According to Kotak Institutional Equities, the sector is entering a structural upcycle with the share of domestic procurement expected to remain above 70%, up from 54% in FY2019. Kotak expects defence exports to reach the government's target of ₹500 billion by FY2029, supported by competitive indigenous platforms and easing export regulations. The brokerage also highlighted drones as the next major growth opportunity, estimating the global military drone market will expand from around $30 billion in CY2024 to $75 billion by 2029.
Wipro shares ended 1.8% higher on Thursday at ₹177.7 before results announcement, though the stock remains down 35% year-to-date. The divergent analyst opinions reflect the stock's 5% dividend yield for FY2027, which provides some support despite fundamental concerns. Nine analysts maintain 'Buy' ratings while 17 others hold 'Hold' ratings, indicating cautious optimism among some market participants. While analysts flagged macro uncertainty and sluggish deal ramp-ups, they believe AI-led demand and attractive valuations could support the stock over the long term. However, ICICI Securities' reduce rating and ₹153 target price reflect concerns about Wipro's revenue growth lagging large-cap IT peers and continued execution challenges. The current consensus suggests that while the dividend yield provides some downside protection, the company's organic revenue growth challenges and margin pressures warrant careful consideration for long-term investors.
