On Friday, Citi maintained its Sell rating on Wipro (NYSE:WIT) Ltd. (WPRO:IN) (NYSE: WIT) while increasing the price target from INR455.00 to INR495.00. The adjustment comes despite the firm's observation of a weaker first quarter for the company, with a 1% quarter-over-quarter decline compared to the 2-3% growth shown by peers TCS and Infosys (NS:INFY).
The firm's analysis highlighted that Wipro's second-quarter guidance of a -1% to +1% quarter-over-quarter constant currency growth could lead to disappointment, especially given the heightened expectations in the market. Additionally, Citi pointed out negative year-over-year trends in total contract value (TCV) and headcount, which decreased by 12% and 6%, respectively.
Citi's valuation of Wipro remains largely unchanged, with the price target increase attributed to a roll forward to 20 times the fiscal year 2026 earnings estimates, up from 19 times September 2025 earnings estimates. This change reflects a sector-wide re-rating rather than an improvement in Wipro's individual performance.
The firm also noted that Wipro's growth continues to lag behind its peers, which is expected to perpetuate the existing valuation gap. Despite a 27% increase in Wipro's stock price since June, Citi sees no early indicators of the anticipated sharp recovery, maintaining a negative coverage view on the stock.
In other recent news, Wipro Ltd. has been a subject of mixed analyst attention, with Citi maintaining a cautious stance, while Nomura/Instinet, CLSA, and Investec have upgraded their ratings.
Citi reiterated its Sell rating on Wipro, citing risks such as slow recovery and management churn, despite a recent surge in the stock price. Meanwhile, Nomura/Instinet shifted its stance from "Reduce" to "Buy," CLSA upgraded its rating from 'Underperform' to 'Outperform', and Investec moved from a 'Sell' to a 'Hold' rating.
These upgrades follow recent leadership changes, successful execution of strategies, and securing of large deals. Wipro's new CEO, Srinivas Pallia, is expected to bring stability to the company's operations.
Wipro has also expanded its partnership with Hanesbrands (NYSE:HBI) Inc., focusing on advancing the apparel company's digital and business transformation initiatives.
Notably, Wipro has closed a substantial five-year deal valued at US$500 million in the communications sector. The company has scheduled its Annual General Meeting for shareholders through video conferencing, emphasizing transparency and shareholder engagement.
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