Wipro shares zoom 8% after better-than-expected Q3, upbeat brokerage views

Wipro guided Q4 IT services revenue to grow in the range of -1 to 1 percent in constant currency terms.

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26 Aug, 2025 12:21

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Information Technology major Wipro delivered better-than-expected earnings for Q3, marked particularly by its continued margin improvement despite a seasonally weak quarter. The company's operating margins, which came at a three-year high in Q3 have garnered positive views from brokerages, with some upgrading their estimates for the IT player.

On the back of this positive momentum, shares of Wipro opened nearly 8 percent higher on January 20. At 09.27 am, shares of Wipro were trading at Rs 303.75 on the NSE.

Wipro reported a 4.5 percent quarter-on-quarter growth in its consolidated net profit to Rs 3,354 crore for the December quarter, while revenue saw a marginal rise of 0.1 percent to Rs 22,319 crore. A Moneycontrol poll of nine brokerages had predicted a 5 percent decline in net profit to Rs 3,040 crore and a 0.6 percent drop in revenue to Rs 22,176 crore, meaning that the company's topline as well as bottomline came well above the Street's estimates.

The IT giant benefited from operational efficiencies and cost optimisation, which lifted its EBIT margin to 17.5 percent—the highest level in three years. This marked the fourth consecutive quarter of margin expansion, as noted by CFO Aparna Iyer.

Brokerage firm Nomura also commended Wipro's earnings beat across parameters in Q3, especially on the margin front. On that account, Nomura retained its 'buy' call on the stock with a target of Rs 340. In addition, the firm also raised its FY25-27 earnings-per-stock estimates for Wipro by 2-5 percent.

Margins for Wipro were a positive surprise for Macquarie as well, beatings its expectations by 106 basis points. Macquarie also held on to its 'outperform' rating on Wipro with a price target of Rs 330.

Meanwhile, Nuvama Institutional Equities believes Wipro's current combination of a favourable portfolio mix, new CEO ushering in positive momentum, strong margin performance and inexpensive valuations makes for an attractive risk-reward profile. The brokerage had recently upgraded the stock to a 'buy' rating and chose to retain it with a price target of Rs 350.

Alongside that, Nuvama also upgraded its FY25 and FY26 estimates for the IT major by 5 percent and 2 percent, respectively, to factor in its higher margins.

On the other hand, even though Citi anticipates Wipro's growth to trail its peers in FY26, it applauded the company's significant margin beat in Q3. Accordingly, the brokerage removed the stock from its negative catalyst watch, but still chose to retain its 'sell' call. Citi has a price target of Rs 280 for Wipro.

Also Read | Wipro seeing momentum in small sized deals, says CFO Aparna Iyer

Nonetheless, the brokerage believes Wipro's stock could get a boost from likely EPS upgrades in the near-term. In addition, the American Depository Receipts (ADRs) of Wipro, listed on the New York Stock Exchange (NYSE) also surged over 4 percent following the company's better-than-expected Q3 numbers. On January 17, ADRs of Wipro ended 4.2 percent higher at $3.44 on the NYSE, following the release of the company's Q3 numbers. Wipro had released its Q4 numbers after Indian market hours on January 17.

Looking ahead, Wipro guided Q4 IT services revenue to grow in the range of -1 to 1 percent in constant currency terms, aligned with market expectations.

Also Read | Wipro ADRs surge 4% after Q3 earnings beat, multi-year high margins