Bengaluru-headquartered IT services player Wipro Ltd announced that it will acquire Connected Services Inc (DTS), its subsidiaries, and certain related assets from Harman International Industries in a deal valued at up to $375 million.
The acquisition, to be executed entirely in cash, is expected to be completed by December 31, pending regulatory approvals, including antitrust clearance in the United States.
"The acquisition expands Wipro’s ER&D service offerings and capabilities by enhancing its AI-powered digital engineering and device engineering, including design-to-manufacturing across technology, industrial, aerospace, healthcare, and consumer industries," the company said in a release.
As part of the acquisition, Wipro will enter into a multiyear strategic agreement with Harman and Samsung, further deepening the relationship and creating new avenues for joint growth and transformation
Brokerages believe that the move will be margin dilutive for Wipro, even as it will seek to boost the firm’s ER&D growth.
International brokerage Morgan Stanley remained ‘equal-weight’ on Wipro, with a price target of Rs 285 per share. The brokerage noted that the acquisition will be accretive to Wipro's ER&D revenue, by around 10 percent as per early estimates, however, it could be dilutive to margins. DTS's customer base and priority sectors complement Wipro's, added the brokerage.
HSBC noted that Wipro’s valuation gap compared to peers is around historic lows. The brokerage chose to maintain its ‘hold’ rating, with a price target of Rs 260 per share, as strong deal wins in recent quarters provide confidence in 2HFY26 growth recovery. Further, client-specific issues in Europe appear largely behind, as do management changes.
JPMorgan, too, is neutral on Wipro. The acquisition is likely to add 0.7 percent growth in FY26 and 2.3 percent growth in FY27, the brokerage noted, even though it could be margin dilutive for the IT services player.
“We have not yet factored the acquisition (likely to contribute ~3 percent to Wipro’s revenue with margin dilution of 50-60bps in first year of consolidation) into our earnings estimates, pending deal closure,” said Emkay Global, retaining its ‘reduce’ call and price target of Rs 280 per share.
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