Wipro shares have opened with massive 6% plus cuts after the tech major gave a disappointing Q1 guidance. The company put out a rather cautious front and said that “elevated levels of macro uncertainty due to tariffs, makes it difficult for it to report positive growth in FY26 – thus derailing its turnaround thesis.” Brokerages have lowered their earnings targets on the stock on the back of this guidance and listed their key worries.
The entire IT pack is under pressure after Wipro’s disappointing Q1 guidance. Here is a look at the key worries highlighted by various brokerages factoring in the macro risks.
Macro uncertainty a big worry
Brokerages highlighted how the management intends to keep margins close to current levels but is facing headwinds from a weak growth environment and large deal implementation cost in H1.The management attributed the weak guidance to client delaying spending amid increased macro uncertainty. It expects to catch up on growth in H2FY26, as some of large deals will ramp up in H2.
Discretionary revival delayed
The delay in discretionary revival is another big worry as brokerages believe that this is also resulting in the valuation gap narrowing down compared to peers. According to Nuvama, “ith the rapid deterioration of macro, leading to uncertainty around discretionary spends and Wipro’s valuation becoming similar to peers (TCS, Infosys and HCL) – we do not see either of the two premises holding up any longer.”
Nomura on Wipro: Cuts FY26 earnings target
Nomura has cut the FY26 EPS target by 2-4%, significantly below consensus. Though they retained the Buy rating, they have lowered the target price to Rs 280 a share Vs Rs 300 a share earlier to factor in macro risks. According to Nomura, “the FY26-27F EPS are 8-9% lower than Bloomberg consensus. After recent increase in the return of capital to shareholders under the revised capital allocation policy, Wipro’s FY27F dividend yield is 4%. The stock currently trades at 18.6x FY27F EPS.”
Nuvama on Wipro: Downgrades to Hold
Nuvama has downgraded the stock to Hold and revised the target price to Rs 260 from Rs 300 a share earlier. According to them, “Wipro’s weak Q1FY26 guidance driven by elevated levels of macro uncertainty due to tariffs, makes it difficult for it to report positive growth in FY26 – thus derailing its turnaround thesis.” They have also trimmed the FY26E/27E EPS by 3% and 3.7% on lower growth expectations.
Motilal Oswal on Wipro: Reiterates Sell
Motilal Oswal expects a 1.9% YoY decline in FY26 revenue on constant currency basis. They expect that the operating margins may hover around 17.2%. They have cut the FY26/FY27 EPS estimates by 4% to account for weak Q1FY26 guidance and sustained demand softness in key verticals and regions. Motilal Oswal reiterated the Sell rating with a target price of Rs 215, implying 17x FY27E EPS.