Wipro shares slump 5% post Q2 earnings; JM Financial retains 'Buy', raises target price

Shares of Wipro Ltd fell sharply in Friday's trade after the IT major reported a marginal rise in profit for the July–September quarter (Q2 FY26). The stock declined 4.63 per cent to touch a day low of Rs 242.

The company reported a 1.1 per cent year-over-year (YoY) increase in consolidated net profit to Rs 3,246 crore, compared to Rs 3,208 crore in the corresponding quarter last year. On a quarter-on-quarter (QoQ) basis, profit dipped 2.5 per cent from Rs 3,330 crore in the April–June 2025 period.

Despite the muted quarterly performance, JM Financial retained its 'Buy' rating on the stock while raising its target price to Rs 290 from Rs 280 earlier. The revised target implies an upside potential of 19.84 per cent from the day's low.

The brokerage noted that Wipro reported 0.3 per cent QoQ constant currency (cc) revenue growth, which was ahead of its estimate of flat growth and within the upper range of the company's guidance band of -1 per cent to +1 per cent. For the December quarter (Q3 FY26), Wipro guided for -0.5 per cent to 1.5 per cent cc QoQ growth, supported by the ramp-up of the Phoenix deal worth $650 million in total contract value (TCV).

Wipro recorded total bookings of $4.8 billion in Q2, translating into a book-to-bill ratio of 1.8x, reflecting its continued success in multi-vendor deals. Adjusted EBIT margins fell 10 basis points (bps), helped by foreign exchange gains and improved operational efficiencies.

JM Financial highlighted that deal transition costs and higher renewals could limit near-term margin levers, but strong order inflows provide visibility for medium-term growth. The brokerage expects 5.4 per cent cc YoY growth in FY27 after a likely 1.4 per cent decline in FY26, supported by a $17 billion last-twelve-month TCV, up 20 per cent YoY.