CFRA has raised the price target on Wipro Ltd. (NYSE: NYSE:WIT) to $7.00 from $6.50, while maintaining a Hold rating on the stock.
The adjustment reflects a valuation update to align with the company's peers, based on a forward multiple for the fiscal year ending March 2026.
The second quarter results for fiscal year 2025 showed a 21% increase in revenue to INR 6.12 billion, although total revenue remained relatively flat at INR 223 billion, a 1% decrease from the previous period.
The analyst noted that Wipro's profitability saw an improvement, with operating profit margins expanding by 1.6 percentage points to 16.8%. This was attributed to better overall utilization, which rose to 86.4% from 84.5%, and a partial recovery in discretionary workload. These positive factors were somewhat offset by wage increases implemented in September and April.
Wipro's total contract value (TCV) for deals remained steady at $3.6 billion, consistent with the last four-quarter average of $3.62 billion and within the range of $3.3 billion to $3.8 billion.
Despite ongoing conversations about the demand for generative AI, the firm anticipates that cautious spending by core customers will result in a lack of excitement in Wipro's top-line growth.
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