Wipro Q1 results: Large deals surprise for 2nd quarter; share price targets upped

Wipro Q1 earnings: A host of brokerages have upped their target prices on Wipro on solid June quarter results, as total contract value at $4,971 million was the highest in history, and the company delivered solid performance on large deals for the second consecutive quarter. 

Brokerages such as Nirmal Bang Institutional Equities see some positivity in the minus 1 per cent to 1 per cent constant currency (CC) revenue growth guidance for 2QFY26E supported by expected ramp-ups in large and mega deals.

"Wipro also remains committed to margin improvement and revenue growth in Capco along with order booking momentum augurs well for margins as this business is more discretionary in nature. Post 1QFY26, we marginally increase our revenue and EPS estimates for FY27-FY28E by 0.8 per cent/1 per cent and 2.4 per cent/1.8 per cent to factor in the revenue visibility on the back of large and mega deals," The brokerage said.

Large deal ramp-ups may weigh negatively on near term margins and operational efficiencies will offset the impact, analysts said.

Wipro share price targets
Antique Stock Broking upped its target on Wipro to Rs 285 from Rs 275 earlier. Goldman Sachs retained its 'Sell' call on Wipro but raised its target to Rs 254 from Rs 247 earlier. JPMorgan stayed neutral and retained its target price of Rs 260. 

Nirmal Bang maintained ‘Hold’ rating on Wipro with a higher target price of Rs 297 against Rs 286 earlier. 

For the quarter, IT Services revenue declined 2 per cent CC QoQ, beating the Street’s expectation of 2.5 per cent degrowth. The IT Services EBIT margin came in at 17.3 per cent, down 20 bps QoQ, slightly better than expectation. Large deals’ TCV was strong at $2.7 billion, up 51 per cent QoQ and 131 per cent YoY.

"Wipro beat Q1 expectations, which were quite low to begin with. Strong deal-wins should support growth in coming quarters. We await signs of macro improvement and consistency in performance to turn buyers. We are raising FY26E/27E EPS by +4.3 per cent/+1.6 epr cent on higher growth expectations. All in all, we continue to value Wipro at 20x FY27E PE with a target of Rs 270 (earlier Rs 260); maintain ‘HOLD’," Nuvama said.

Meanwhile, the IT comopany declared an interim dividend of Rs 5 per share fort FY26.