Brokerages expect a decline to Rs 220 as Wipro shares plummet 9.5%. How should investors proceed?

Shares of Bengaluru-based IT major Wipro fell as much as 9.5% to an intraday low of Rs 241.75 on the BSE on Friday after the company reported a mixed performance for the December quarter and issued a muted growth outlook for the March quarter.

Global brokerage Jefferies assigned one of the lowest target prices on the stock at Rs 220 and reiterated an underperform rating, citing weak earnings growth visibility. Wipro reported IT services revenue of $2.6 billion for the third quarter, up 1.4% quarter-on-quarter in constant currency terms. However, the company guided for just 0–2% QoQ constant currency revenue growth in the fourth quarter, including a 150 basis point contribution from the Harman acquisition.

“We expect Wipro to deliver around 2% EPS CAGR over FY26–28E. Limited earnings growth requires higher dividend yields of 7–8% or more to make the stock attractive,” Jefferies said, adding that with the current dividend yield at about 3%, the stock could see further de-rating. The brokerage maintained its underperform rating with a rolled-over price target of Rs 220, based on 17 times earnings.

The weaker-than-expected Q4 guidance, factoring in fewer working days, partial contribution from Harman DTS and delays in ramp-up of some large deals, dampened investor sentiment. According to Jefferies analyst Akshat Agarwal, the guidance implies organic growth of -1.6% to 0.4%, which was the key negative surprise from the quarter. The brokerage cut its revenue estimates for FY26–28 by 1.5% and now expects a constant currency revenue CAGR of 2.6% over the period.

Nomura, however, took a more positive view, highlighting Wipro’s dividend yield of around 4% based on Friday’s closing price. The brokerage reduced its target price to Rs 290 from Rs 300 but retained a buy rating, while trimming FY26–28 EPS estimates by 2–3%.

Excluding Harman, analysts estimate Wipro’s organic growth in the fourth quarter to be around -0.5%, as ramp-ups of two large deals have been deferred and discretionary spending remains cautious. Motilal Oswal said near-term revenue visibility remains limited due to fewer working days and delayed deal ramp-ups. The brokerage now expects an organic revenue decline of 0.4% and overall year-on-year constant currency revenue growth of 0.5% in FY26, maintaining a neutral rating with a target price of Rs 275.

Wipro’s total contract value (TCV) for the quarter stood at $3.3 billion, down 5.7% year-on-year in constant currency terms, translating into a book-to-bill ratio of 1.27x. Large-deal TCV, defined as deals worth over $30 million, declined 8.4% YoY to $871 million, indicating a moderation from the peak levels seen in earlier quarters.

Elara Capital flagged concerns around growth and margins, noting that some large deals won in previous quarters are not ramping up as expected and could impact revenues in the coming quarters. It also pointed out that the margin profile of the Harman DTS acquisition is lower than Wipro’s core business, which could lead to margin moderation. Elara has a sell rating on the stock with a target price of Rs 220, citing weak growth prospects relative to peers and pressure on margins.