Wipro Shares Soar 8%: Unmissable Q3 Results and Expert Advice on Buy, Hold, or Sell

Wipro Limited’s Q3FY25 results showcased a strong financial performance, with net profit rising by 24.5% year-on-year (Y-o-Y) to Rs 3,350 crore. Additionally, this represented a 4.5% rise from quarter to quarter (Q-o-Q). Revenue came to Rs 22,320 crore, representing a flat Q-o-Q performance and a moderate 0.5% Y-o-Y increase. The $2.62 billion contribution from the IT services category represented a 1.2% Q-o-Q and 1% Y-o-Y rise.
At a three-year high of 17.5%, Wipro’s EBIT margin increased by 70 basis points (bps) on a quarterly basis. The outcomes surpassed Bloomberg’s projections, which called for a profit of Rs 3,059 crore and sales of Rs 22,221 crore.
Market Performance
Following the findings, on January 20, 2025, Wipro’s shares jumped 8.33% to reach an intraday high of Rs 305.35. Despite a typically bad quarter, the company’s performance was generally praised by brokers, who pointed to better-than-expected earnings.
Brokerages’ Perspectives
- The Perspective of Nuvama
Wipro’s Q3FY25 performance, according to Nuvama, exceeded expectations. Despite a 0.1% Q-o-Q growth and a 0.7% Y-o-Y loss in constant currency (CC) terms, IT Services revenue was better than the 0.6% and 0.5% reductions that were predicted. The broking kept its “Buy” recommendation with a target price of Rs 350 after raising its FY25E and FY26E profit projections by 5% and 2%, respectively.
- The Viewpoint of Nomura
Nomura emphasised the manufacturing and healthcare industries, which expanded 2.5% and 6.7% Q-o-Q in CC, respectively. Furloughs, meanwhile, caused a 1.9% drop in BFSI. With a target price of Rs 340 and a valuation of the company at 24x FY27E EPS, Nomura maintained its “Buy” recommendation.
- Motilal Oswal’s Analysis
Motilal Oswal estimated Wipro’s operating margin to be 17% in FY25 and forecast a CAGR of around 3.1% for FY24–27E IT Services revenue. The broking kept a “Neutral” rating with a target price of Rs 290 even after raising its FY25 EPS forecast by 5%.
- Macquarie’s Outlook
With a target of Rs 330, Macquarie maintained a “Outperform” rating. Because of Wipro’s strong turnaround plan and increased dividend payments, it preferred the company over Tech Mahindra.
- Citi and Morgan Stanley
Citing worries about growing attrition rates and cost constraints, Citi kept its rating at “Sell” with a target price of Rs 280. Despite admitting to the margin growth, Morgan Stanley gave the shares a “Underweight” rating and set a target price of Rs 250.
Operational Highlights
- Pipeline and Deal Wins
In Q3FY25, Wipro signed 17 significant agreements totalling $961 million in contract value (TCV). This marked a 6% Y-o-Y rise even though it showed a 36% Q-o-Q fall. Cost reduction and vendor consolidation agreements kept the transaction pipeline strong.
- Vertical and Geographic Performance
The resurgence in discretionary spending helped the US BFSI and healthcare industries grow well. Nonetheless, Europe and the APMEA area saw difficulties, with client-specific headwinds occurring in the industrial and energy verticals.
- Revised Capital Allocation Policy
Wipro committed to returning 70% of net income to shareholders, up from the previous 45–50%, as part of a revision to its capital allocation policy. This was viewed as a move that would benefit shareholders, which increased investor confidence even further.
Challenges and Outlook
- Muted Q4FY25 Guidance
In CC terms, Wipro’s Q4FY25 revenue forecast varied from a 1% decrease to a 1% increase. Regional softness, particularly in Europe and APMEA, is reflected in our gentle advise.
- Concerns Over Vertical Weakness
The manufacturing, resources, and energy sectors were identified by analysts as having limitations. Concerns about deal conversion rates still exist in Europe.
Conclusion
Wipro’s results in Q3FY25 demonstrated its operational effectiveness and margin stability. Notwithstanding difficulties in several industries and regions, the business showed consistent performance and a strong emphasis on client-centric expansion. Although brokerages have different opinions, they all agree that sustained growth is necessary in all verticals and geographical areas. Wipro is positioned for a competitive edge in the changing IT market because to its smart capital deployment and strong transaction pipeline.