Wipro Neutral with Target of Rs 215: Motilal Oswal

Motilal Oswal Downgrades Wipro to Neutral Rating

Wipro, a leading IT services company, reported its fourth-quarter financial results for fiscal year 2026, which showed a revenue of USD2.6 billion, marking a 0.2% quarter-over-quarter (QoQ) compound annual growth rate (CAGR), falling short of Motilal Oswal's estimate of 1.0% QoQ growth.

The company's order intake stood at USD3.5 billion, a 3.5% QoQ increase, with a large-deal total contract value (TCV) of USD1.4 billion, a decline of 18% year-over-year (YoY). Meanwhile, the adjusted earnings before interest and taxes (EBIT) margin came in at 17.2%, meeting the research firm's estimate. Adjusted profit after tax (PAT) stood at INR34.8 billion, a 3.7% QoQ increase, surpassing Motilal Oswal's estimate of INR33 billion.

When considering the results in Indian rupees, Wipro's revenue, adjusted EBIT, and adjusted PAT grew 4.0%, 1.8%, and 2.2% year-over-year (YoY), respectively, in fiscal year 2026. For the upcoming first quarter of fiscal year 2027, Motilal Oswal expects Wipro's revenue, adjusted EBIT, and adjusted PAT to grow 11.9%, 13.9%, and 2.5% YoY, respectively.

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The company's free cash flow stood at 101.4% of its net profit for fiscal year 2026. Furthermore, its return on equity (RoE) for the same period came in at 15.7%, compared to 16.6%, 14.4%, and 15.8% in fiscal years 2025, 2024, and 2023, respectively.

Key Highlights

Motilal Oswal believes that broad-based growth across verticals and a stable conversion of deal TCV to revenue will be key to a constructive view. Consequently, the research firm has reiterate its Neutral rating on Wipro with a target price (TP) of INR215, implying 14 times the estimated earnings per share (EPS) for fiscal year 2028.