Wipro Q4 Review — Weak Results; Tariff Disruption To Delay Recovery Further; Dolat Capital Cuts Target Price

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Dolat Capital Report

Wipro Ltd.’s IT services reported a constant currency revenue QoQ decline of 0.8% (versus estimate flat revenue), led by broad-based decline across most verticals. However, operating profit margin remained flat at 17.5% QoQ (our estimate: 17%) with beat led by operational efficiency in S&M (down 6% QoQ).

TCV wins/Large deal wins at $4 billion/$1.8 billion were healthy, but Q1 FY26 guidance of –3.5% to -1.5% CC growth builds in significantly heightened macro uncertainty affecting client spends and slow deal win conversions, implying FY26 to be another year of muted growth.

The guidance and commentary indicate that tariff-related disruptions are likely to postpone the industry's recovery further. Consequently, we lower our FY26E revenue esimate by 4%, while earnings estimate remain unchanged for FY27E.

Although valuations have eased, growth outlook remains hazy. Thereby, we maintain our ‘Reduce’ rating with target price of Rs 260 at 20x FY27E earnings.

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