Wipro share price up 4%: Nomura sees 15% upside after Q2 results

The Wipro share price jumped nearly 4% in early trade today, October 16. The shares are in focus after the technology giant released its quarterly results on Thursday.

Japanese brokerage Nomura has retained its ‘Buy’ rating on the stock and raised the target price by 5% to Rs 200. This implies an upside of nearly 15% from the stock’s closing price of Rs 174 on Thursday.

Domestic brokerage Motilal Oswal maintained its ‘Neutral’ rating on the stock with a target price of Rs 170. This implies a 2% downside from the stock’s closing price on Thursday.

Wipro reported a 1.9% year-on-year(YoY) decline in consolidated net profit to Rs 3,199.7 crore in Q2FY27. Sequentially also, the net profit fell 4.67%. However, India’s fourth-largest IT company, reported higher-than-expected Q2FY27 revenue helped by a revival in spending by its European clients and artificial intelligence unlocking new revenue streams.

Wipro’s gross revenue rose 9.1% YoY to Rs 24,752.7 crore during the Q2FY27.

Wipro’s revenue for the quarter was higher than market expectations, and sequential growth in constant currency terms was led by the consumer vertical. However, the health vertical was weak. Its EBIT margin at 16.4%, up 40 bps sequentially, was largely in line with Nomura’s projections.

Wipro’s management said that salary increases had pressured margins in the first quarter, and these should improve with continued operational improvements. Nomura expects an EBIT margin of 16.4-17% in FY27-FY28.

The IT major has guided for -1.5% to +0.5% sequential revenue growth in constant currency Q3FY27, incorporating normal seasonal furloughs and lower working days consistent with prior year.

Nomura expects the IT major’s revenue, in dollars, to fall 0.5% in FY27 but rise 1.7% in FY28.

“The company noted that the pipeline is strong in areas of vendor consolidation and cost take-out opportunities. Wipro signed nine large deals in 2Q, reflecting a balanced mix of new business wins and existing client expansions.

However, management acknowledged that large deal signings were lower than expected as some confirmed orders slipped to 3QFY27 due to paperwork delays. Wipro management remains confident that these deals will close and the 3QFY27 pipeline is robust,” Nomura said.

Nomura has raised its earnings per share (EPS) view for FY27-FY28 by 5.2%-5.5%, driven by lower share count due to the recently concluded buyback.

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