Brokerages are cautious on the Wipro stock on account of its muted guidance that remained unchanged.
The broking firm Motilal Oswal has maintained a “Neutral” rating on Wipro, with a target price of Rs 490 per piece. The brokerage house revised its estimates on the stock. It believes that the company will deliver IT Services operating profit of 17% in FY25 and over 18% in FY26, translating into a net profit of 13% over FY24-26.
“However, given the peak utilization, we do not anticipate any material margin improvement in the near term. Management has guided that near-term margins would remain range-bound,” said Motilal in its research report.
Prabhudas Lilladher has a “Hold” rating on the stock of IT-major Wipro. It has an unchanged target price of Rs 440 per equity share.
“We believe, the revenue conversion still remains a challenge for the company, given its exposure to discretionary areas (including consulting) is quite meaningful. The slower large deal ramp-ups, delay in executions, and lack of immediate mega deal alternatives to plug those gaps would certainly keep the top-line growth unstable,” said Lilladher in its research report.
The brokerage house, Prabhudas Lilladher, has estimated that the company will deliver flat revenue growth in FY25. The IT company will deliver a 5% on-year margin improvement of 40 basis points in FY25 and 50 basis points in FY26. It expects the company to deliver a 5% earnings growth over FY24-26.
Another brokerage house, JM Financials, in a research report said that it has kept the target price unchanged at Rs 550 per equity share. It also maintained the “Buy” rating on the stock of Wipro.
JM Financials cut the revenue estimates by 5/3 percentage points to 0.4% in FY25 and 7.1% in FY26. Also, the brokerage house has cut the earnings per share estimates by 4-5% for FY25-26. “We believe growth, when it returns, will be the biggest lever,” JM Financials said.