Wipro (WPRO IN) – Q2FY26 Result Update – Stable quarter with improving outlook, Deal ramp up to drive recovery… – HOLD
Published on 17 Oct 2025
The revenue growth (+0.3% QoQ CC) was above our estimates (-0.3% QoQ CC), primarily attributed to continued momentum within Capco (BFS) and Tech vertical, which was partly offset by weakness in pockets beyond BFS. The company reported another quarter of elevated large deal TCV, that cumulatively adds up to USD 5.5b in H1, which in itself is higher than FY25 (USD 5.4bn). However, the nature of the deals is concentrated more on the vendor consolidation and cost optimization side, which ideally comes at a higher tenure and lower margins. With that the company is aspiring to deliver betterQ3 with a mid-range revenue guidance of +0.5% QoQ. We expect the ramp up of two mega deals to support growth in H2, while also factoring in the seasonality and structural slowdown as the incremental headwinds. Additionally, we have not integrated DTS numbers into our forecasts, awaiting consolidation by the end of Q3. On the margins front, we expect the incremental ramp up of large deals will require upfront investments, while furlough impact in H2 would provide lesser margin headroom. We are broadly keeping our estimates unchanged at -1.6%/+3.5/5.2% YoY CC, while our margin estimates are 16.9%/16.8%/17.3% for FY26E/FY27E/FY28E. The stock is currently trading at 20x/19x FY26E/FY27E. We roll forward and assign 18x to Sep’27 EPS for a TP of 250. Retain HOLD.
