Wipro Q3 Earnings: Mixed Views as UBS Lifts Target, Profit Dips

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AuthorIshaan Verma|Published at:
Wipro Q3 Earnings: Mixed Views as UBS Lifts Target, Profit Dips
Overview

Wipro's third-quarter earnings presented a mixed picture. While revenue saw a modest 3.8% increase to ₹23,556 crore, profit declined 4.4% to ₹3,119 crore. Brokerages remain divided, with UBS raising its target price to ₹290 despite a weaker Q4 outlook from some.

Wipro posted its third-quarter results, revealing a revenue climb of 3.8% to ₹23,555.8 crore. This figure narrowly surpassed Bloomberg estimates. However, net profit for the period saw a contraction of 4.4% quarter-on-quarter, settling at ₹3,119 crore against ₹3,262 crore in the prior quarter, and falling short of analyst expectations of ₹3,354 crore. Earnings Before Interest and Taxes (EBIT) also decreased by 5.1% to ₹3,491 crore. Margins compressed to 14.8%, down from 16.2% sequentially and below the estimated 16.4%. A ₹303 crore benefit from the New Labour Code was noted in the quarter.

Brokerage Divergence Amidst Results

Analyst sentiment remains sharply divided following the earnings disclosure. UBS maintained its 'Neutral' rating but elevated its price target for the IT major to ₹290 from ₹285. The firm cited strong traction within the Banking, Financial Services, and Insurance (BFSI) vertical and improving momentum in European manufacturing. Capco's performance in energy consulting was also highlighted as healthy.

Nomura retained its 'Buy' recommendation but adjusted its target price downward to ₹290 from ₹300. Despite steady deal wins countering macro headwinds, Nomura anticipates a weaker Q4 guidance. The brokerage noted management's aim to keep EBIT margins within a tight band and pointed to a high dividend yield as a key stock support.

Analyst Concerns on Future Outlook

Conversely, Bank of America (BofA) and Jefferies reiterated 'Underperform' ratings. BofA set a target price of ₹230, acknowledging that while Q3 revenue was in line and margins beat estimates, the Q4 revenue outlook is below expectations. It also noted a significant number of net new wins that remain in a work-in-progress stage.

Jefferies, with a ₹220 target price, similarly flagged delayed deal ramp-ups as a persistent drag on growth. While the Harman acquisition offers some support, the firm indicated that integration and ramp-up phases are likely to pressure margins moving forward. The divergence suggests investors face uncertainty regarding Wipro's near-term growth trajectory and margin stability.

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