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In-line Performance; Focus on Execution

Est. Vs. Actual for Q1FY26: Revenue – INLINE ; EBIT Margin – MISS ; PAT – INLINE

Recommendation Rationale

• Macro headwinds: The quarter began with considerable macro uncertainty, which led to muted overall demand. Clients focused on cost optimisation and vendor consolidation, while also fast-tracking AI and modernisation initiatives.

• Deal wins/pipeline: The company secured a large deal worth $2.6 Bn, registering 131% YoY growth. Overall deal bookings stood at $4.9 Bn, reflecting strong deal momentum.

• AI Implementation: Wipro has deployed over 200 AI-powered agents across multiple use cases, including lending, claims processing, and network management. The company continues to position itself as an "AI-first, AI-everywhere enterprise," aiming to solve complex challenges and enable business model transformation.

Sector Outlook: Cautiously optimistic Company

Outlook & Guidance: Wipro is witnessing increased enterprise focus on scaling AI adoption across applications, workflows, and data platforms. The company expects stronger performance in H2FY26 compared to H1, supported by recent large deal wins and a healthy pipeline. With a strong deal pipeline across business verticals, new partnerships, and higher adoption for new-age technologies, the growth outlook for the company is expected to be sequentially better.

Current Valuation: 18x FY27E P/E

Current TP: 275/share

Recommendation: We resume our coverage with a HOLD rating on the stock.

Financial performance

In Q1FY26, Wipro reported revenue of Rs 22,135 Cr vs Rs 21,964 Cr, up 0.8% YoY but down 1.6% QoQ. EBIT stood at Rs 3,548 Cr vs Rs 3,652 Cr, declining 2.1% YoY and 9.1% QoQ due to higher operating expenses. Net income stood at Rs 3,337 Cr vs Rs 3,003 Cr, up 11.1% YoY but down 6.5% QoQ, supported by lower tax expenses. However, in CC terms, revenue declined 2.3% YoY and 2% QoQ. Attrition rose by 100 bps to 15.1% vs 14.1% YoY. The board recommended an interim dividend of Rs 5/share

Valuation & Recommendation

The management expects better H2FY26 and expects it to be better than FY25 on the back of robust strategies and project execution skills. We are constructive on the long-term outlook of the company. Therefore, we resume over coverage with a HOLD rating on the stock and assign an 18x P/E multiple to its FY27E earnings to arrive at a TP of Rs 275/share, implying an upside of 7% from the CMP.

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