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Analysts noted that Wipro’s margins hit a three-year high, and the management met its revenue guidance; Should you buy, sell or hold?
Wipro Share Price Today
Wipro’s shares surged by as much as 7.8% on Monday, reaching Rs 303.85 on the BSE, following the IT services company’s announcement of a 24% year-on-year growth in its consolidated net profit for the quarter ended December 31, 2024. The profit stood at Rs 3,354 crore, while revenue from operations saw a modest increase of 0.5%, reaching Rs 22,319 crore.
On a sequential basis, profit after tax (PAT) rose by nearly 5%, with revenue showing a slight increase of 0.1%.
Srini Pallia, CEO and MD of Wipro, stated, “In a seasonally weak quarter, our strong in-quarter execution helped us deliver results above the top end of our revenue guidance. We also achieved our highest margins in the past three years, all while continuing to invest in our people.”
Wipro secured total deals worth $3.5 billion during the quarter, with large deals accounting for $961 million, marking a 6% YoY increase in constant currency terms.
Should You Buy After Q3 Earnings?
Analysts noted that Wipro’s margins hit a three-year high, and the management successfully met its revenue guidance for the second consecutive quarter. While the company’s deal wins were somewhat soft, they were in line with expectations. Some analysts, however, believe that the stock is fairly priced and that its upside potential is limited.
Nirmal Bang Institutional Equities acknowledged Wipro’s strong performance in a seasonally weak quarter but raised concerns about the sustainability of this growth. They pointed out weaknesses in the Energy, Manufacturing, Resources, and Technology verticals, although there were early signs of recovery.
The brokerage highlighted several positives in Wipro’s Q3 results, including strong momentum in large deals (17 in Q3FY25), top account growth (up 8.5% QoQ), and a three-year high in margins. However, they also pointed to Wipro’s high reliance on top clients’ growth, weak deal conversion in Europe, and challenges in leadership building in the APMEA region. In response, they adjusted their EBIT and EPS estimates for FY26/27 upwards but reduced their revenue estimates by 4.3% for the same period. They reiterated a “HOLD” recommendation on Wipro with a target price of Rs 306, based on a valuation multiple of 21.3 times the December 2026 EPS of Rs 14.4 per share.
MOFSL highlighted strong growth in Wipro’s US BFSI and Healthcare verticals, driven by a recovery in discretionary spending. The company’s focus on client mining and expanding its consulting business has bolstered its deal pipeline, especially in the Americas. However, challenges remain in certain verticals and geographies, with muted 4Q guidance (-1% to 1% in CC), reflecting regional softness, particularly in Europe and APMEA. The manufacturing and energy & utilities sectors continue to face client-specific headwinds. MOFSL maintained a “Neutral” stance with a target price of Rs 290.
Nuvama Institutional Equities, on the other hand, noted that Wipro’s results aligned with their recent upgrade thesis, based on the company’s favorable portfolio mix and strong margin performance. They raised their FY25 and FY26 earnings estimates by 2-5% due to higher margins and maintained a “Buy” rating with a target price of Rs 350.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
