Wipro's 2nd sizable acquisition in 9 months: Buy, sell or hold stock? Target price

Wipro Ltd shares gained over 3 per cent in Tuesday's trade, taking its winning streak to the fourth straight session. The stock gained as the IT major signed an 8-year strategic transformation deal with Olam Group, a global food and agri-business leader that generates over $50 billion in revenue, employs 40,000, and is majority-owned by Temasek Holdings. 

Emkay Global said the deal with Olam Group and the acquisition of Mindsprint will strengthen Wipro’s farm-to-fork capabilities, scaling the impact of Wipro Intelligence across the food and agri-business industry.

"This marks Wipro’s second sizable acquisition in the past 9M, following the purchase of HARMAN’s DTS unit for $375 million, which is likely to contribute 3 per cent to revenue. Pending deal closure, we have not yet factored the current acquisition (likely to contribute 1.3 per cent to Wipro’s revenue) in our earnings estimates. We retain REDUCE and target price of Rs210, at 15x Mar-28E EPS," it said.

On Tuesday, shares of Wipro were trading at Rs 203.50, up 3.19 per cent. Emkay's target price on Wipro suggests just over 4 per cent upside potential over the prevailing price. 

"It provides long-term revenue visibility and deeper access to Olam’s operations across farming, trading, and supply chain to Wipro. Moreover, Mindsprint brings domain expertise and IP-led platforms that Wipro can leverage across other clients, enhancing its ability to win similar deals, expand work within existing accounts, and scale consulting-led solutions," Emkay said.

As a part of the agreement, Wipro will acquire Olam Group’s IT and digital services arm, Mindsprint, for $375 million, which would become a wholly owned subsidiary of the IT major. Wipro, on the other hand, will deliver end‑to‑end transformation services to Olam Group through a consulting‑led and AI‑powered approach. The contract is expected to exceed $1 billion in total value, including a committed spend of $800 million (annual spend of $100 milion; 55-60 per cent of total annual spend by Olam Group on tech and shared services).

"The deal is valued at 2.8 times P/S on 2025 basis. Mindsprint’s leadership team, led by CEO Suresh Sundararajan, will continue managing the business, ensuring stability and continuity while expanding its capabilities. The transaction is expected to close by the end of Q1FY27 (end of Jun-26)," Emkay said.