'Sell' Wipro Shares Maintains Motilal Oswal Post Q1 Results; Sees Current Levels To Limit Margin Expansion

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Motilal Oswal Report

Wipro Ltd. reported Q1 FY26 IT Services revenue of $2.5 billion, down 2.0% QoQ constant currency, above our estimate of 2.5% QoQ decline. It posted an order intake of $4.9 billion (up 25.6% QoQ), with a large deal TCV of $2.6 billion (up 51% QoQ). Ebit margin of IT Services was 17.3% (estimate 17.5%). PAT stood at Rs 33 billion (up 6.7% QoQ/10.8% YoY) vs our estimate of Rs 32 billion. In INR terms, revenue was flat YoY, Ebit declined 1%, and PAT grew 9.8% YoY.

In Q2 FY26, we expect revenue/Ebit to grow 1.1%/3.1% and PAT to remain flat YoY.

We believe improvement in execution and sustained conversion of deal TCV to revenue will be key for a constructive view. We reiterate our Sell rating on Wipro with a target price of Rs 230, implying 18x FY27E EPS.

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