- Wipro stock has rallied 16% in five days following the company's report of an expanded 16.5% Q2 operating margin and strong free cash flow
- Despite the stock surge, brokerages are holding onto their "Sell" ratings. They point to a significant 58.6% drop in large-deal contract value and cautious Q3 constant-currency revenue guidance.
- To bridge the rating disconnect, management needs to start closing pending large deals, offering clearer insight into organic growth and acquisition impacts, and consistently improving sequential revenue and margins to hit their stated goals.
Wipro stock price jumped over 16% in the past five trading sessions, following the company’s latest quarterly earnings report.
This surge set the stock up for its biggest weekly gain in six years. On Friday, Wipro shares climbed as much as 7%, bouncing back from recent lows around ₹157.
But this market momentum doesn’t quite match what many institutional brokerages are thinking. Many still rate the stock a “Sell” or “Underperform.” This divergence highlights a difference between the market’s immediate reaction to the results and the longer-term concerns that analysts have raised.
What the Earnings Revealed
Wipro reported second-quarter revenue of approximately ₹24,753 crore, up 1.1% from the previous quarter and slightly surpassing analyst expectations. Operating margins improved to 16.5%, thanks to better efficiency and favorable currency exchange rates.
Net profit dipped a bit, mainly due to less “other income” after a share buyback earlier in the year. Even so, these operational figures brought some relief, particularly after a cautious period.
For all those good operational points, the results had some weak spots too. Total contract bookings dropped 22.9% quarter-over-quarter in constant currency, hitting $2.595 billion. And large deal bookings fell nearly 59% to $674 million.
Looking ahead to the December quarter, management expects revenue to grow anywhere from -1.5% to +0.5% quarter-over-quarter. So, you had better-than-expected revenue and margins, but then weaker deal momentum and cautious guidance.
The financial picture was definitely mixed, explaining why investors and analysts are viewing it from different angles.
Brokers See It Differently
Investors and brokers ask different questions. Brokers focus on what a business is worth over the next year or two. The market, in the short term, usually just reacts to whether news was better than expected.
While total contract value hit $2.6 billion, large deals saw a sharp drop. Large-deal TCV fell 58.6% from the previous quarter, landing at $674 million. Analysts see this slowdown in contracts as a sign that turning deals into revenue will stay slow through 2027.
Big names like Goldman Sachs, Citi, and Jefferies have kept their Sell or Underperform ratings. They point to the steep drop in new bookings, weak organic growth, and an unclear path to faster, consistent revenue.
Nirmal Bang rates the stock a Sell, setting a ₹143 target. That’s about 19% below early Friday’s price, which was near ₹176. Dam Capital’s ₹180 target offers only a 3% upside, and PL Capital has a Hold rating with a ₹166 target. Nomura is the lone Buy, targeting ₹200.
Is Wipro Stock a Buy Now?
Given the current situation, buying Wipro stock right now might not be the best move. After its recent sharp price jump, most analysts’ target prices show little room for further upside.
Any case for buying the stock depends on how well the company can execute. Wipro needs to consistently turn its existing $2.6 billion deal pipeline into secured, multi-year contracts. That’s how it’ll tackle worries about stagnant revenue.
While Wipro does offer attractive dividend yields and has managed its margins well, the risk-reward balance doesn’t look great right now. That’ll likely stay true until new deal bookings clearly pick up.
Investors focused on the sequential revenue beat and margin expansion, viewing them as signs of operational stability after a difficult period. In addition, the broader IT sector also advanced on improving sentiment.
They have their focus on weak bookings, flat organic growth and soft guidance. On the other hand, the rally reflects relief and positioning after a steep 2026 decline.
Short-term momentum is positive, yet the absence of clear evidence that weak bookings will reverse soon suggests a more cautious stance for longer-term investors until conversion improves.