Wipro Ltd.'s September-quarter results offered limited relief to investors, with revenue marginally ahead of estimates but profit missing expectations as brokerages continued to flag weak growth prospects. Citi raised its target price to Rs 145 from Rs 140, while retaining Sell, and Jefferies increased its target to Rs 155 from Rs 150, maintaining Underperform. Both brokerages remain cautious about the company's growth outlook, with a sharp decline in large deal wins adding to concerns about future revenue momentum.
Wipro's IT services business reported flat constant-currency revenue growth sequentially, improving from a 1.2% decline in the previous quarter. However, total bookings fell 22.9% sequentially in constant-currency terms to $2.6 billion, while large deal wins declined to $700 million from $1.6 billion. Jefferies said the 45% year-on-year decline in deal wins pointed to a weaker growth outlook, while Citi flagged weak forward indicators.
Management guided for IT services revenue growth of -1.5% to 0.5% in constant-currency terms for the December quarter, broadly in line with expectations. The company said clients remained focused on cost optimisation, legacy modernisation and scaling artificial intelligence initiatives, while maintaining confidence in the coming quarters.
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Wipro Q2 Results Highlights (Consolidated, QoQ)
- Revenue rose 1.1% to Rs 24,753 crore from Rs 24,479 crore. (Estimate: Rs 24,710 crore)
- EBIT increased 4.1% to Rs 3,986 crore from Rs 3,830 crore. (Estimate: Rs 4,018 crore)
- EBIT margin stood at 16.1%. (Estimate: 16.26%)
- Net profit fell 4.5% to Rs 3,200 crore from Rs 3,352 crore. (Estimate: Rs 3,306 crore)
Here's What Brokerages Are Saying After Wipro Announced Q2 Results
Citi
- Maintained 'Sell'; Target Price Raised To Rs 145 From Rs 140
- Described Q2 performance as slightly ahead of muted expectations.
- Flagged weak forward indicators despite sequential improvement in revenue.
- Noted management's endeavour to achieve consistent sequential organic growth.
- Slightly upgraded earnings per share estimates, factoring in the buyback.
Jefferies
- Maintained 'Underperform'; Target Price Raised To Rs 155 From Rs 150
- Said the growth outlook remained weak.
- Flagged a 45% year-on-year decline in deal wins as a sign of weaker growth prospects.
- Cut US-dollar revenue estimates by 2% but raised earnings per share estimates by up to 2% due to foreign exchange movements.
- Expects earnings per share to grow at a compound annual growth rate of 4.5% over FY27-FY29.
- Said the expected earnings growth, alongside a 5% dividend yield, leaves an unattractive risk-reward profile.
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