Wipro shares gained over 6% on Friday, October 16, reaching ₹185.17 following better-than-expected September quarter results that exceeded analyst expectations on both margin and revenue growth fronts. According to CNBC TV18, this marks the fourth straight day of gains for Wipro, which is now up 13.5% for the week - its best performance since October 2020, when it had gained 19% during a week. The stock has also rebounded nearly 20% from its 52-week low of ₹156.75, demonstrating strong momentum despite remaining the worst performer on the Nifty IT index year-to-date, down 32% for the year compared to the Nifty IT index's 18% decline. The positive momentum reflects investor confidence in the company's ability to deliver better-than-expected performance and signals of improving growth prospects in coming quarters.
Wipro reported a 9.1% year-on-year rise in Q2FY27 revenue to ₹24,752.7 crore, up 1.1% quarter-on-quarter, surpassing analyst expectations of ₹24,627 crore. However, net profit declined 1.9% YoY to ₹3,201 crore. The company's revenue from the IT services segment was ₹24,667 crore, up 1% YoY. According to CNBC TV18, Wipro's revenue in constant currency terms stood at 0% sequentially, but the street was anticipating it to be a negative 0.75%. The company's EBIT margin turned out to be better than street expectations of 16% at 16.5%, expanding 50 basis points sequentially and 30 bps above consensus estimates, though it was down 20 bps year-on-year. Wipro expects revenue from the IT services business segment to be in the range of USD 2,571 million to USD 2,625 million in Q3 FY27, translating to a sequential guidance of (-)1.5% to (+)0.5% in constant currency terms.
The total contract value (TCV) of deal wins in Q2FY27 fell 22.9% sequentially to $2.6 billion, the lowest in Wipro's history, according to PL Capital. Large-deal bookings dropped 58.6% to $674 million, with Wipro signing nine large deals including an AI-led transformation engagement with a global financial institution. Management attributed part of the decline to two contracts that could not be signed on time and slipped into the December quarter, adding that the pipeline remained very robust. However, Nirmal Bang Institutional Equities noted that Wipro's large-deal wins were the weakest in at least two years, questioning whether conversion will materialize despite strong pipeline visibility. The healthcare vertical continues to face pressure from US policy changes and lower discretionary spending, although some seasonal recovery is likely in Q3.
Nomura has retained its Buy rating on Wipro with a raised target price of ₹200, citing a slight revenue beat and confidence in delayed large deals closing. As per CNBC TV18, Nomura wrote in its note that the guidance given by Wipro for the third quarter is in-line with their expectations and that the company will return to the 17% to 17.5% EBIT margin band over a period of time. Jefferies has upgraded its rating on Wipro following the strong Q2 performance, with the brokerage noting that revenue and margins exceeded expectations and citing management's comments that two delayed large deals are expected to close this quarter, helping improve the growth outlook. Dolat Capital said the quarter reflected stable revenue performance and improving profitability, adding that better deal conversions could lift growth in the second half of the fiscal year. Motilal Oswal has now assigned a Neutral rating with a target price of ₹170, as reported by Moneycontrol. The brokerage noted that Wipro posted IT Services revenue of USD 2.6 billion, flat QoQ in constant currency, above their estimate of 0.5% QoQ decline.
Despite the recent surge, Wipro has the highest number of sell ratings among largecap IT companies, with 20 out of 44 analysts tracking the stock maintaining sell ratings. According to CNBC TV18, this compares to TCS's five out of 49 analysts, Infosys's four out of 49, HCLTech's 10 out of 45, Tech Mahindra's five out of 44, and LTM's 11 out of 44. Motilal Oswal Financial Services expects Wipro to lag peers and deliver slightly negative growth in FY27, compared with its earlier estimate of flattish growth. In Q2, competitors Tata Consultancy Services, HCL Technologies and Tech Mahindra reported sequential CC revenue growth of 0.5%, 2.3% and 2.4% respectively. The anti-AI narrative is likely fuelling optimism in Indian IT stocks, with Prabhudas Lilladher noting that with global AI build-out capex expected to reach $1 trillion by CY26, investors are questioning the payback period. Wipro trades at a FY28 price-to-earnings multiple of 13, at a discount to tier-1 peers, with this valuation gap likely to persist for now.
