Shares of Wipro Ltd. surged in trade on Monday after the Indian IT major announced a contract with Singapore-based Olam Group, worth up to $1 billion. The stock is trading at Rs 197.9, accounting for gains of more than a percent, but the stock was trading much earlier in early trade, reaching an intraday high of Rs 201.
Part of the broader deal includes the acquisition of Mindsprint, which is the IT services arm. Headquartered in Singapore, Mindsprint offers technology and digital services across enterprise applications, data and analytics and digital platforms, among other things.
Mindsprint has a global workforce of more than 3,200 employees, spread across India, Singapore, the US, the UK and the Middle East.
Mindsprint particularly has a strong presence in the Food and Agri-business industry, in addition to supply chain transformation capabilities and proprietary IP-driven solutions. The company reported a consolidated revenue of $135 million in CY25, an almost 4% year-on-year increase from $130 million in CY24.
Currently trading with a relative strength index of 34, which suggests neutral market sentiment, Wipro shares have fallen as much as 25% on a year-to-date basis, largely on account of AI-disruption fears and the ongoing conflict in the Middle East.
Should you buy Wipro?
NDTV Profit spoke to Ambareesh Baliga, an independent market analyst, who offered a fundamental view of Wipro following its deal with Olam Group.
"The $1 bn Olam deal is a positive for Wipro - especially since this is an AI-led solution for the food & agribusiness sector. However, the stock has been an underperformer in this sector for a variety of reasons.
"I don't expect this order to change that perception. Thus, we could see a short-term upmove for the stock, but from a long-term perspective, things may not change much," he said.
Meanwhile, G Chokkalingam, Founder & MD of Equinomics Research, believes Wipro may offer up to 10% upside in the best-case scenario.
"Wipro has been growing revenue and net profit at just 4% and 2%, respectively, in the last 3 years. We believe the threat from AI is real, and it could pull down its business growth further in the near future. In this background, securing a $1 billion contract from Olam Group is positive, but it may not help significantly with the future growth of Wipro.
"Annualised contract value from this client could be just a little above 1% of its trailing annual revenue, which is not substantial enough to boost its business growth, after taking into consideration the AI threat. At best, Wipro may offer 5% to 10% possible tactical, considering weakness in the rupee exchange rate," he said.
ALSO READ: Wipro Acquires Singapore-Based Firm For $375 Million As Part Of $1 Billion Contract Win
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