Wipro Stock Upgrade: Target Price Set at Rs 200 by ICICI Securities
Wipro Faces Continued Top-Line Challenges in Q1FY27
Wipro has reported another weak organic guidance of -1.8% quarter-over-quarter (QoQ) constant currency (CC) at the midpoint for the first quarter of fiscal year 2027 (Q1FY27). This development comes on the heels of a disconnect between deal bookings growth and revenue growth, which may be attributed to higher AI-led deflation and market share loss.
Key Performance Indicators
| Metric | FY26 |
|---|---|
| Top 10 clients growth (YoY) | 1.8% |
| Total revenue growth (YoY in USD) | -0.3% |
Despite strong margins in the fourth quarter, investments in large deals, AI platform business, and a 2-month incremental wage hike are likely to exert pressure on margins in the upcoming fiscal year 2027 (FY27). Adjustments for the buyback and currency depreciation have offset the cut in revenue and other income estimates, leading to a 2% earnings per share (EPS) change for FY27E and FY28E.
The research firm continues to value Wipro at 14 times its fiscal year 2028 (FY28E) EPS of INR 14, resulting in a target price of INR 200. The firm maintains a HOLD rating on the company's stock. However, there is a downside risk to the valuation multiple if the revenue growth trajectory does not recover by Q2FY27.
Investor Takeaway
Investors should be cautious about Wipro's weak organic guidance and potential margin pressure.
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