The slide began after a weak Q3 showing, with the company reporting a 7% year-on-year decline in net profit. Sentiment deteriorated further as the IT pack came under pressure amid AI-related concerns following Anthropic’s launch of its Claude plug-in aimed at automating tasks. The stock dropped 10% in January and extended losses with a 15% correction in February.
The decline deepened in March, with shares falling another 7% amid risk-off sentiment triggered by escalating tensions involving Iran, Israel, and the US.
However, April has brought some cheers for Wipro as the stock has gained nearly 8% this month, building momentum as the earnings season begins. The pressure on markets eased somewhat after Iran and the US agreed to a ceasefire for two weeks. The situation remains quite fluid and any escalation could potentially unsettle the markets.
The stock is stuck in weak territory, feels Bonanza’s Research Analyst Abhinav Tiwari. “We expect Wipro to continue its downward momentum compared to its peers on the back of weak growth guidance of 0-2% due to delays in deal wins and pricing pressure.”
“A sustained improvement in execution and a pickup in large deal wins will be key triggers to watch, as they could drive the stock’s next leg of upside,” Tiwari said, adding margins could remain under pressure in the near term due to the integration of Harman and upcoming wage hikes.
Technical expert Nilesh Jain said Wipro looks weak and that it was better to avoid the stock and focus on mid and small-cap IT stocks. The Vice President – Head of Technical and Derivative Research at Centrum Finverse has a ‘sell on rise’ view on the stock.The company informed on Thursday that it will consider a buyback of shares along with its fourth quarter results on April 16. While details such as the size of the buyback, price and route have not yet been disclosed, the move signals potential capital allocation action by the company at a time when sentiments in IT stocks volatile.
Q4FY26 expectations
Company’s earnings will likely be a strong trigger for price action, either way.
Brokerage ElaraCapital expects 8% year-over-year and 3.2% quarter-over-quarter growth in the company’s revenues, alongside a 6% decline in the March quarter net profit. Sequentially, the bottomline could drop over 0.5%. It has a ‘Reduce’ rating on the counter. The company is expected to underperform the sector, Elara’s preview revealed.
Axis Securities also expects an 8% jump in Wipro’s Q4 revenue at Rs 24,262 crore while estimating a 3% QoQ uptick. PAT could fall 2% to Rs 3,504 crore in the quarter under review while rising 11%, sequentially.
Sector view
After a nearly 25% fall in the Nifty IT index in the January-March quarter, valuations are now at a “very compelling level with 1-year forward P/E for large cap companies coming to around 16-17x compared to the 10-year median of 21.6x,” Tiwari opined.
In his view, the focus will now shift to developments around AI-led disruptions, creating an overhang on future earnings. D-Street will track FY27 guidance by companies along with deal pipeline strength.
“Interestingly with INR depreciation lately, we expect earnings to improve as well,” the Bonanza analyst said, adding the IT theme looks promising after the valuation correction.
TCS declared its earnings on Thursday, reporting a 12% YoY growth in its consolidated net profit, which stood at Rs 13,718 crore in the fourth quarter. Revenue from operations rose 10% YoY to Rs 70,698 crore.
Also read: TCS Q4 FY26 Results: Profit jumps 12% YoY to Rs 13,718 crore; revenue rises 10%
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)