Wipro Reports 9.1% Revenue Growth in Q2, Analysts React
Wipro's shares increased by over 2% following a 9.1% rise in revenue for Q2FY27, but analysts have mixed views on the company's future.
Wipro's gross revenue reached Rs 24,752.7 crore in Q2FY27, marking a 9.1% YoY increase.
Nomura has set a target price of Rs 200, while Goldman Sachs maintains a SELL rating due to declining deal wins.
The company anticipates a revenue growth range of -1.5% to 0.5% for Q3FY27.
Wipro's shares surged by 2.3% to a high of Rs 178 on the Bombay Stock Exchange after the company announced a 9.1% year-on-year increase in gross revenue, totaling Rs 24,752.7 crore for the second quarter of FY27. Despite this growth, net profit saw a decline of 1.9% year-on-year, amounting to Rs 3,201 crore.
The Bengaluru-based IT services firm is projecting a modest revenue growth for the upcoming third quarter, estimating a range between -1.5% and 0.5% on a sequential basis when adjusted for constant currency. This cautious outlook reflects ongoing challenges in the market, despite the recent revenue uptick.
In terms of analyst feedback, Nomura has raised its target price for Wipro to Rs 200, indicating a potential upside of 15%. They noted that the Q2 results slightly exceeded their revenue expectations while margins remained stable. Conversely, Goldman Sachs has retained its SELL rating, highlighting a 26% year-on-year decline in deal wins, which raises concerns about future revenue visibility. They suggest that the appointment of an external CEO could be a significant factor for a potential re-evaluation of the stock.
Wipro secured nine large contracts during the quarter, which included both new business and expansions with existing clients. However, management acknowledged that the number of large deals fell short of expectations due to delays in paperwork, pushing some confirmed orders into the next quarter. Despite these setbacks, Wipro remains optimistic about closing these deals and expects a robust pipeline in the December quarter.
Looking ahead, analysts are closely monitoring Wipro's performance in the upcoming quarters. Nomura forecasts a slight decline in dollar revenue growth for FY27, followed by a rebound in FY28. Meanwhile, Emkay has maintained a Reduce rating with a target price of Rs 170, citing weak order intake and performance in key segments. Investors are advised to stay informed as Wipro navigates these challenges and opportunities in the coming months.
