Wipro shares rise over 2% as Q2 revenue grows 9% YoY. What are Nomura, Goldman Sachs analysts saying?

The Bengaluru-based IT services provider now expects revenue growth in the third quarter of the current financial year to range from -1.5% to 0.5% on a sequential basis in constant currency terms.

Buy, sell or hold Wipro shares?Nomura has raised its target price for Wipro to Rs 200 (15% upside) while retaining a Buy call on the stock. It said Q2 slightly beat its revenue estimate and reported in-line margins.

Wipro signed nine large deals during the quarter, comprising a mix of new business wins and expansions with existing clients. However, management acknowledged that large deal signings fell short of expectations as paperwork delays pushed some confirmed orders into Q3FY27. It remains confident that these deals will close and expects a strong pipeline in the December quarter.

Nomura forecasts dollar revenue growth of -0.5% in FY27 and 1.7% in FY28. It forecasts EBIT margins of 16.4-17% in FY27 and FY28. Wipro also expects to return to its target margin range of 17-17.5% over time.

Goldman Sachs has maintained its SELL rating on Wipro, despite the company reporting a Q2 performance that exceeded expectations on both revenue growth and margins.

The brokerage noted that deal wins declined 26% year-on-year on a trailing 12-month basis, leaving limited visibility on revenue growth. It views the appointment of an external CEO as the key potential catalyst for a re-rating of the stock. Goldman Sachs has also marginally raised its earnings estimates for Wipro.

Emkay has retained its Reduce rating on Wipro with a target price of Rs 170, valuing the stock at 12 times its estimated September 2028 earnings per share (EPS). The target suggests a downside of 2.3% from the previous closing price of Rs 174.05.

The brokerage said Wipro delivered a steady operating performance in the September quarter, with IT services revenue declining 0.1% sequentially to USD 2.61 billion. The segment's operating margin improved 50 basis points to 16.5%. However, Emkay highlighted weak order intake and subdued performance in the healthcare and technology and communications segments. It also lowered its FY27-29 EPS estimates by 0.4-1.3%.