Wipro shares get a downgrade from CLSA in new year, stock reacts 

Shares of IT major Wipro Ltd, which have seen correction from 52-week high reached in December 2024, have received a downgrade from global brokerage CLSA. It has downgraded shares of technology services provider to "hold" from its earlier rating of "outperform". The brokerage has maintained its price target at Rs 303.

In the last two weeks, Wipro stock has fallen 4%. The stock hit a 52-week high of Rs 319.95 on December 20, 2024.

CLSA expects Wipro to remain a laggard in quarter that ended on December 31, as it expects its Constant Currency growth to remain flat on a sequential basis.

In 2024, Wipro saw earnings downgrades of 1% & P/E rerate from 19.7X to 24.4X, said CLSA adding that the next leg of rerating for Wipro can only be achieved if it starts growing in-line with peers. However, the signs of that currently remain elusive.

Another brokerage Citi has maintained its sell call on Wipro with a price target of Rs 280.

Meanwhile, Wipro shares fell 1% to Rs 297.20 in early deals on BSE today. Market cap of the firm stood at Rs 3.15 lakh crore. Total 0.83 lakh shares of the firm changed hands amounting to a turnover of Rs 2.47 crore on BSE.

On a yearly basis, the Wipro stock has gained 27%. Wipro shares are trading lower than the 5 day, 10 day, 20 day, 30 day but higher than the 50 day, 100 day, 150 day and 200 day moving averages.

Another brokerage Morgan Stanley has an 'underweight' rating and a price target of Rs 250 per share.

The global brokerage said after the company's acquisition of Capco in 2021 and then Rizing's acquisition in 2022, it sees the latest target entity - Applied Value Technologies as relatively smaller.

The brokerage stated that the said acquisition will offer more of a capability boost to the Bengaluru-based IT major and also add some marquee clients to its portfolio given the small scale. Additionally, Morgan Stanley expects the acquisition to have a limited impact on the company's (Wipro) financials in FY25/FY26 owing to the small-scale of the acquired entity.

BNP Paribas has a price target of Rs 232.5 It has a bearish stance on the stock. Wipro stock stood at Rs 299.3 when the recommendation was given.

Brokerage Investec has reiterated its sell call with a target of Rs 290. The brokerage expects an improved capital allocation strategy and enhanced shareholder payouts from the company.

Considering that Wipro holds a significant cash reserve of $6.1 billion, Investec believes that the company’s new capital allocation policy is likely to align with industry peers.