3 days Ago By Heena Ojha
Wipro Ltd.'s outlook for the first quarter of fiscal 2026 remained muted amid an uncertain macro environment, as the company guided for a degrowth of -3.5% to -1.
5%. Brokerages are cautious on near-term growth estimates as macro factors weigh on sentiments and discretionary spending looks bleak.At least 13 brokerages, including Goldman Sachs, CLSA, JPMorgan and Jefferies have slashed their price target on Wipro, after the company cut its revenue outlook for April-June quarter, according to Bloomberg data.
Citi, BofA, and Investec are also among those who have cut their target prices on the stock. Here is a look at what they have to say.Earnings OverviewIn the fourth quarter of the last financial year, Wipro's consolidated revenue rose 0.
8% sequentially to Rs 22,504.2 crore. This was slightly below the Rs 22,684-crore consensus estimate of analysts tracked by Bloomberg.
The information technology major's net profit increased 6.6% sequentially to Rs 3,588 crore, beating the consensus estimate of Rs 3,364 crore.The company's net profit rose by 6.
6% to Rs 3,588 crore, surpassing the consensus estimate of Rs 3,364 crore. Ebit saw a 1% increase to Rs 3,902 crore, which was marginally below the expected Rs 3,923 crore. The margin remained flat at 17.
3%, aligning closely with the estimated 17.29%.Citi On WiproCiti has maintained a 'sell' rating on Wipro and cut the target price to Rs 215 from Rs 240.
Wipro's Q1 guidance is well below expectations, with management commentary indicating that tariffs have created a lot of uncertainties for clients, according to the brokerage. Multiple segments, including manufacturing, consumer, BFS, and Europe, are impacted, it noted.In the fourth quarter, Wipro saw decent trends in total contract value, although the link between TCV and growth has been limited across the sector, according to the brokerage.
Cash conversion remained strong, with operating cash flow to Ebitda at around 93% on a trailing 12-month basis.Citi recently reduced its growth estimates before the fourth quarter, and since then, macroeconomic uncertainty has increased, it noted. Comments from TCS and Wipro indicate a challenging outlook for the first half of fiscal 2026, which is usually the better part of the year for the industry.
Discretionary spending is likely to be affected, Citi said.Stock Recommendations Today: Wipro, Adani Ports, Angel One, Bharti Airtel, IndiGo On Brokerages' RadarBofA On WiproBank of America maintained its 'underperform' rating on Wipro and reduced the target price to Rs 225 from Rs 260. The brokerage highlighted that Wipro's Q4 revenue and Q1 outlook are below expectations.
The ask of a catch-up could remain for FY26, with improved market shares in the European manufacturing and high-tech segments being key to narrowing the growth deficit versus peers.The company's higher exposure to consulting services also adds lower visibility on the immediate outlook, the brokerage added.BofA has reduced its earnings per share estimates for FY26 and FY27 by 5-6% and lowered the price target.
This new target price is based on a price-to-earnings ratio of 18 times, compared to the previous 20 times, and reflects a 25% discount compared to TCS, projected forward to financial year 2027.Investec On WiproInvestec has maintained its 'hold' rating on Wipro and cut the target price to Rs 250 from Rs 260. The brokerage expects fiscal 2026 to be another year of revenue decline, weaker than consensus estimates.
In FY25, Wipro increased its Ebit percentage in the IT services business by 1%, mainly due to reduced selling, general, and administrative expenses and better utilisation of resources.Fiscal 2026 is likely to be the third consecutive year of revenue decline, with EBIT margin expansion appearing tough. Weak Q1 FY26 revenue guidance reflects uncertainties, leading Investec to cut FY26/27 earnings per share estimates by 4.
6% and 6%, respectively.All business sectors, except for energy, resources, and manufacturing, saw declines. The healthcare sector was the largest contributor to the quarter-on-quarter decline.
Revenue also fell across all regions, with Europe being the biggest contributor to this decline, Investec noted.Stock Market Live: GIFT Nifty Implies Higher Open; Angel One, Wipro, Lupin, Paytm Share Prices In Focus. Read more on Earnings by NDTV Profit.
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