Wipro Upgraded to Buy, Target Price Set at Rs 200 by Prabhudas Lilladher

Wipro Q4 Results Disappoint, FY27E Outlook Revised Downward

Wipro's Q4 revenue growth of +0.2% quarter-over-quarter (QoQ) constant currency (CC) fell short of Prabhudas Lilladher's and consensus estimates of +0.8% QoQ CC. The company's revenue growth was impacted by multiple headwinds in the organic business in the America region, including slower deal ramp-ups and client-specific issues in the banking, financial services, and insurance (BFSI) segment. Additionally, the Healthcare segment experienced a sharp decline due to seasonality and policy changes.

Despite strong FY26 deal wins of USD 16.4 billion, which represented a year-over-year (YoY) increase compared to FY25, Wipro is expected to face continued client-specific challenges and slower deal conversion in the near term. The company's weak Q1 revenue guidance of -2% to 0% QoQ CC includes the contribution of Olam Group and Alpha Net acquisition for approximately 1.5 months. Considering these factors, Prabhudas Lilladher anticipates FY27E to be another challenging year.

Revised Revenue Growth Estimates

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The company's Q1 revenue growth will face headwinds from wage hikes, acquisition integration costs, and large deal ramp-ups. However, Prabhudas Lilladher largely maintains its EBIT margin estimates due to solid cost control and currency support. The research firm assigns a price-to-earnings (PE) ratio of 14x to FY28E earnings per share (EPS) to arrive at a target price of INR 200 (earlier INR 230) and downgrades its recommendation to HOLD from BUY.