Hold Wipro; target of Rs 260: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on Wipro with a target price of Rs 260 in its research report dated July 18, 2025.

Broker Research

July 18, 2025 / 11:09 IST

hold

26 Aug, 2025 12:21

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Todays L/H

Prabhudas Lilladher's research report on Wipro

The revenue growth (-2.0% QoQ CC) was above our estimates (-2.6% QoQ), partly aided by outperformance of CAPCO (+6.0% YoY). The growth performance in Consumer and BFS (beyond CAPCO) was weak. The discretionary budgets were tight in Consumer and Manufacturing, especially in Europe, otherwise AI-led transformation and modernization of data witnessed steady recover in Q1. The exceptional large deal TCV (including 2 mega deals) is a mix of both renewals and NN. The large wins are a strategic outcome of securing the existing books while building new offerings on top. However, the nature of the deals is concentrated more on the vendor consolidation and cost optimization side, which ideally comes at a higher tenure and lower margins. The early part of the deals would require investments in right sizing the talent base and setting up stage for deployment, which ultimately leads to take a hit on the margins. We expect the ramp up of two mega deals to support growth in H2, while also considering the underlying weakness and slower conversion. We are revising our estimates to -1.5%/+3.4 YoY CC (vs -2.5%/2.9% earlier), while cutting our margin estimates by 30/40bps for FY26E/FY27E to 16.9%/17.1%. Our EPS estimates see an uptick of ~1% in FY26/FY27.

Outlook

The stock is currently trading at 20x/19x FY26E/FY27E and Upgrade our rating to HOLD (REDUCE earlier).

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