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Investing.com - CLSA downgraded Wipro Ltd. (NYSE:WIT) from Outperform to Hold and lowered its price target to INR236.00 from INR265.00 following the company’s second-quarter fiscal 2026 results. The stock, currently trading at $2.64 and near its 52-week low, appears undervalued according to InvestingPro analysis.
The IT services provider, with annual revenue of $10.09 billion, reported second-quarter results largely in line with expectations and showed strong deal wins, but its third-quarter revenue growth guidance disappointed analysts. Wipro projected currency-adjusted quarter-over-quarter growth between -0.5% and +1.5% for the third quarter, below CLSA’s estimate of 1% to 3%. The company maintains a solid financial health score of "GOOD" according to InvestingPro metrics.
CLSA noted a concerning break in the growth trend of Wipro’s top client accounts during the quarter. Despite strong deal win momentum, the company continued to lose market share, according to the research firm.
The downgrade reflects CLSA’s concerns about Wipro’s execution and what it described as "the most inferior capital allocation policy among its top five Indian IT peers." The firm also cited challenges with Wipro’s client selection, noting these clients struggle to withstand macroeconomic downturns.
CLSA lowered its revenue growth forecast for Wipro and reduced its valuation multiple, resulting in the new 12-month price target of INR236, down from its previous target of INR265. Despite market concerns, Wipro trades at a P/E ratio of 18.76 and offers a 3.84% dividend yield, having maintained dividend payments for 25 consecutive years. For deeper insights and additional metrics, investors can access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Wipro Limited reported a 1.2% year-over-year increase in net income to $365.6 million for the second quarter ending September 30, 2025. Despite this rise in profit, the company missed analyst expectations on earnings per share, posting $0.03 against the anticipated $0.04. Revenue for the quarter was $2.56 billion, aligning closely with the consensus estimate of $2.57 billion, reflecting a 1.8% year-over-year growth and a 2.5% sequential increase.
In terms of analyst actions, CFRA lowered its price target for Wipro to $3.00 from $3.20, citing growth concerns while maintaining a Hold rating. On a more positive note, Investec upgraded Wipro’s stock rating from Hold to Buy, raising its price target to INR285.00 from INR272.00 due to a strong deal pipeline and order backlog. Wipro’s quarter-over-quarter growth in constant currency terms was 0.3% for the second quarter of fiscal year 2026, aligning with Investec’s flat quarter estimates. The company has also provided guidance for the third quarter of fiscal year 2026, projecting growth between -0.5% and 1.5% quarter-over-quarter.
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