Wipro Q4 Guidance Misses Expectations: Buy, Hold or Sell This IT Stock?
Wipro Limited reported a mixed operating performance for the December quarter, with revenue and margins remaining largely flat. However, its guidance for the March quarter came in below analysts’ expectations. Analysts noted that growth was impacted due to the slow ramp-up of large deals and weakness in the EMR vertical.
JM Financial said Wipro’s December quarter results were underwhelming and highlighted ongoing growth challenges, as strong deal bookings over the past 12 months have yet to translate into actual revenue. The brokerage cut its earnings-per-share (EPS) estimates by 3–4.5 percent but maintained its target price, citing the potential for significant capital returns through buybacks, relatively low valuation at 19x FY27 earnings, and expectations of a gradual recovery in overall demand.
Wipro has guided for 0–2 percent sequential revenue growth in Q4 in constant currency terms, which includes a 150 basis point contribution from the HARMAN acquisition.
Nomura said it had expected Wipro to guide for 0–2 percent quarter-on-quarter organic growth. Management attributed the guidance to fewer working days in Q4 compared to Q3, as well as delayed ramp-ups in some deals won in earlier quarters of FY26 within the BFSI and Hi-Tech verticals.
“We have reduced our FY26–28 EPS estimates by 2–3 percent. We have cut our target price to ₹290 (from ₹300), based on an unchanged multiple of 22x 1HFY28F EPS. Our valuation methodology is discussed here. Following the recent increase in capital returns to shareholders under the revised capital allocation policy, Wipro’s FY27 dividend yield stands at 4 percent. The stock is currently trading at 20.8x FY27F EPS,” the note said.
MOFSL stated that Wipro’s demand has largely been driven by cost optimization and vendor consolidation, rather than broad discretionary spending or large-scale AI-led programs. While the overall deal pipeline remains intact, the brokerage believes the pace at which these deals are converting into actual revenue has been slower than expected, resulting in uneven growth.
Maintaining a ‘Neutral’ stance on the stock, MOFSL said, “We believe revenue visibility in the near term will remain limited, as fewer working days in the fourth quarter combined with delayed deal ramp-ups will weigh on growth. As a result, we now expect a 0.4 percent decline in organic revenue in FY26 and a 0.5 percent year-on-year increase in total revenue.” MOFSL has set a target price of ₹275 for Wipro.
Nirmal Bang said Wipro’s total bookings in the third quarter stood at $3,335 million, down 29 percent quarter-on-quarter and 5 percent year-on-year. Large deal bookings were $871 million, declining 69.5 percent sequentially and 9.4 percent annually.
The brokerage noted that this came after two consecutive quarters in which Wipro had secured deals worth more than $4.5 billion.
Nirmal Bang added, “Wipro delivered decent revenue and strong margin performance, but lower deal TCV reduces future visibility. This is due to cautious client spending driven by lower ACV, longer deal tenures, reduced discretionary spending, and ongoing macroeconomic uncertainty.” The brokerage has maintained a ‘Hold’ rating on the stock with a target price of ₹296.
About the Author
