On Thursday, Bernstein SocGen analysts adjusted their outlook on Wipro Ltd (NSE:WIPR). (WPRO:IN) (NYSE:WIT), a leading global information technology, consulting, and business process services company with a market capitalization of $29 billion. The firm’s analyst, Rahul Malhotra, revised the price target downward to INR200.00 from the previous INR210.00. Despite this change, the analyst maintained an Underperform rating on the company’s shares. According to InvestingPro data, three analysts have recently revised their earnings estimates downward for the upcoming period.
The revision comes in the wake of Wipro’s fourth-quarter fiscal year 2025 performance, which did not meet market expectations. The company reported a 0.8% quarter-over-quarter decline in IT Services Revenue, which was at the lower end of its guidance range that projected between a 1% decrease and a 1% increase. Despite these challenges, InvestingPro analysis shows Wipro maintains strong financial health with a "GREAT" overall score, supported by solid metrics including a healthy current ratio of 2.72x and more cash than debt on its balance sheet. Wipro’s management has voiced concerns regarding an uncertain global macroeconomic environment, noting that clients are taking a cautious approach to IT spending.
For the first quarter of fiscal year 2026, Wipro provided revenue guidance indicating a potential decrease of 3.5% to 1.5% quarter-over-quarter, which further suggests a challenging year ahead for the company in terms of growth.
Bernstein SocGen also updated their earnings per share (EPS) estimates for Wipro for fiscal years 2026 and 2027. The firm’s analysts reduced their EPS forecasts by 4.6% for FY26 and by 7.5% for FY27. The target multiple was maintained at 15.5 times next twelve months (NTM) price-to-earnings (P/E), with the valuation rolled over to the last twelve months (LTM) of March 2027. According to the analyst, the updated price target of INR200 represents a roughly 19% downside from the current level.
The changes in Wipro’s stock outlook reflect the broader concerns about the global economic climate and its impact on the technology sector, particularly in the area of IT spending. Trading at a P/E ratio of 20x, Wipro shows relatively modest valuations compared to its peers. While Wipro’s performance relative to its larger peers has been a factor in the analyst’s continued Underperform rating, InvestingPro’s Fair Value analysis suggests the stock may be slightly undervalued at current levels. Discover more insights and 8 additional ProTips about Wipro in the comprehensive Pro Research Report, available exclusively to subscribers.
In other recent news, Wipro Limited reported first-quarter earnings per share of $0.04, aligning with analyst expectations, and revenue of $2.64 billion, also in line with forecasts. However, the company’s guidance for second-quarter revenue, projected between $2.51 billion and $2.56 billion, fell short of the consensus estimate of $2.66 billion, indicating a potential decline. Despite this, Wipro’s net income for the fourth quarter grew by 6.4% sequentially to $417.8 million, and its operating margin for IT services remained steady at 17.5%.
CFRA analyst Hazim Bahari maintained a Hold rating on Wipro, lowering the stock’s price target from $4.00 to $3.50, reflecting a higher valuation multiple due to anticipated EPS growth through FY26. Meanwhile, UBS analyst Shaleen Kumar upgraded Wipro shares from Neutral to Buy, raising the price target to INR335.00. This upgrade follows a strong third-quarter performance, with an EBIT margin peaking at 17.5% over the past 12 quarters.
Wipro’s management expressed optimism about future discretionary spending and demand for its Capco services, particularly in the BFSI sector. Both CFRA and UBS noted improvements in Wipro’s financial metrics, with CFRA raising its EPS forecasts based on better-than-expected margin assumptions. UBS highlighted potential margin upside due to favorable conditions and increased capital allocation, suggesting that the current valuation may not fully account for expected growth in Wipro’s consulting division.
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