Wipro shares outperform Infosys, TCS, HCL Tech in past 6 months. Should you buy stock?

Shares of Wipro Ltd have outperformed peers HCL Technologies Ltd, Infosys Ltd, Tata Consultancy Services Ltd, Tech Mahindra Ltd and L&T Technology Services Ltd (LTTS) in the past six months. In fact, it is the only stock in the tier 1 pack IT that delivered double digit returns in the period mentioned.

For Wipro, the demand is improving in select pockets, but it is not enough to ensure reasonable growth, said Kotak Institutional Equities which met CFO Aparna Iyer. The IT major's CEO, Kotak said, is focused on better execution, adding that the margin improvement trajectory will be constrained by a tough demand environment.

Kotak said the focus is also on the senior management retention and that the momentum is picking up in Capco across most geographies.

Wipro shares trade at 19 times estimated FY2026 EPS and has unfavorable risk-reward characteristics, the domestic brokerage said. It retained its 'sell' call on the stock with a fair value of Rs 440.

Wipro shares are up 11 per cent against LTTS' 8 per cent slide, Tech Mahindra's 6 per cent rise, Infosys 4 per cent fall, HCL Tech's 4.4 per cent decline and a flat TCS.

"Wipro faces multiple challenges, including structural factors that are difficult to dislodge. Our estimates of flat revenue in FY2025 already bake in some level of demand improvement. The cautious view on the stock continues. We value the stock at an unchanged 17 times June 2026E EPS, leading to an unchanged FV of Rs 440. We maintain our SELL rating," Kotak said.

Healthcare is a bright spot and the demand is better incrementally in BFS vertical after a difficult FY2023, aided by the ramp-up of deals in Americas and Capco. Demand is weak in BFS (ex-Capco) in Europe and APAC, Kotak said while expecting Telecom vertical to benefit in 2HFY25 from the ramp-up of a mega deal.

"Demand continues to be muted in other verticals, such as consumer and E&U. The deal pipeline is improving overall and is stronger in the Americas and weaker in APMEA. The magnitude of small- and medium-sized deals is improving but still lower than pre-Covid levels," it said.

Kotak said some senior management churn is expected in the initial year of the CEO change. The focus will be on minimising the churn, ensuring the retention of senior leaders and navigating people changes smoothly.

"Gaps in leadership will be filled with a mix of internal promotions and external hires while ensuring continuity in client relationships," it said.