Wipro Target Rs 275: Motilal Oswal Maintains Neutral Stance

TECH

Overview

Motilal Oswal has issued a research report on Wipro, maintaining a Neutral rating with a target price of ₹275. The IT major's third-quarter FY26 IT Services revenue of USD2.6 billion met expectations with 1.4% quarter-on-quarter growth. However, order intake declined 30% sequentially to USD3.3 billion, with large deal TCV down 6.2% year-on-year. Margins remained stable.

Q3 Performance Meets Revenue Estimates

Wipro Limited reported its third-quarter fiscal year 2026 results, with IT Services revenue reaching USD2.6 billion. This figure represents a 1.4% increase quarter-on-quarter in constant currency terms, aligning with analyst expectations. The company's adjusted earnings before interest and taxes (EBIT) margin stood at 16.5%, slightly above the estimated 16.4%. Adjusted profit after tax (PAT) grew 3.6% sequentially to INR34 billion, beating the forecast of INR33 billion, though this figure excludes a one-time INR3,028 million impact from labor code adjustments.

Order Intake Weakness Raises Concerns

Despite the revenue performance, Wipro's order intake for the quarter saw a significant drop, falling 30% sequentially to USD3.3 billion. The total contract value (TCV) for large deals was reported at USD0.9 billion, marking a 6.2% decrease year-on-year. This decline in new business acquisition could signal potential headwinds for future revenue streams.

Outlook and Rating Maintained

Looking ahead, Motilal Oswal has reiterated its Neutral rating on Wipro shares, setting a target price of ₹275. This price target implies a valuation of 20 times FY28 estimated earnings per share. The brokerage firm highlighted that sustained improvement in operational execution and a consistent conversion of the existing deal TCV into revenue will be crucial factors for a more positive outlook on the stock.

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