IGI Logo

In-line Performance; Decent Deal Wins

Est. Vs. Actual for Q2FY26: Revenue – INLINE; EBIT Margin – INLINE; PAT – INLINE

Change in Estimates YoY post Q2FY26:

FY26E/FY27E: Revenue: 0.4%/0.3%; EBIT: 4.5%/0%, PAT: 1.6%/0%

Recommendation Rationale

* Macro Headwinds: The quarter continued to remain sequentially better amid a lack of improvement in demand. Clients continued to focus on cost optimisation and vendor consolidation, while also fast-tracking AI and modernisation initiatives.

* Deal Wins/Pipeline: Total large deals consist of $2.8 Bn, registering 31% YoY growth. Overall deal bookings stood at $4.7 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 officially launched "Wipro Intelligence," a unified suite of AI platforms and solutions designed to help clients scale their AI initiatives. This platform integrates Wipro's capabilities to drive productivity and business innovation for clients.

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 to perform better sequentially, 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 (Earlier Valuation: 18x FY27E P/E)

Current TP: Rs 275/share (Earlier TP: Rs 275/share)

Recommendation: We recommend a HOLD rating on the stock.

Financial Performance

In Q2FY26, Wipro reported revenue of Rs 22,697 Cr vs Rs 22,302 Cr, up 1.8% YoY and 2.5% QoQ. EBIT stood at Rs 3,681 Cr vs Rs 3,673 Cr, up 0.2% YoY and 3.8% QoQ due to higher topline growth. Net income stood at Rs 3,262 Cr vs Rs 3,209 Cr, up 1.7% YoY but down 2.2% QoQ, led by lower other income sequentially. However, in CC terms, revenue fell by 2.6% YoY but was up by 0.3% QoQ. Attrition (TTM basis) rose by 40 bps to 14.9% vs 14.5% YoY.

Valuation & Recommendation

The management expects better sequential performance backed by robust strategies and project execution skills. We are constructive on the long-term outlook of the company. Therefore, we continue to maintain a HOLD rating on the stock and value the company at 18x P/E multiple to its FY27E earnings to arrive at a TP of Rs 275/share, implying an upside of 8% from the CMP.

Relative Performance

For More Axis Securities Disclaimer https://simplehai.axisdirect.in/disclaimer-home

SEBI Registration number is INZ000161633