Wipro shares to turn ex-dividend today; payment date, stock price targets

Wipro Ltd, whose shares got ex-bonus in the ratio of 1:1 last month, will turn ex-dividend today. The IT firm had announced an interim dividend of Rs 6 per share following its December quarter results. The payment of interim dividend will be made on or before February 15, 2025, the IT major had said earlier.

Wipro announced a dividend of Re 1 each in calendars 2024 and 2023 and Rs 6 in total in calendar 2022. Wipro shares tanked 3.78 per cent on Monday, but are up 17.47 per cent in the past six months. Historically, the Wipro stock has traded at a discount to Tata Consultancy Services (TCS) Ltd and Infosys Ltd, given its lower growth and margin profile, exposure to consulting business and lower dividend payout.

"We expect the pressure on revenue and earnings to marginally ease, given signs of recovery in its consulting business and optimism surrounding the demand environment. Reiterate SELL with a revised target price of Rs 252 (against Rs 220 earlier), based on 18 times FY27E EPS," Systematix Institutional Equities said earlier this month.

It believes a material improvement in total contract value (TCV) and better-than-expected earnings are key upside risks.

Wipro’s Q3 revenue was in the middle of the guidance issued at the end of Q2. Revenue growth was better in the US markets but weak in other markets. The company is taking corrective actions as regards the new leadership in APMEA and some markets in Europe to revive growth.

"Margin performance continued to improve, led by higher offshoring and more fixed-price contracts. This performance may continue in the coming quarters. Deal wins were steady but continued to be lower than the peak achieved a few quarters’ ago – Improvement here would help revive confidence as regards growth," said Elara Securities.

Wipro, in the past, underperformed due to frequent exits in leadership, which seems to be behind it, but valuations are not comforting given the recent run-up in the stock price, Elara said while suggesting a target price of Rs 250 on the stock.

JM Financial said stable margins should also allow Wipro to invest in growth as demand turns.

"We were already building 17.5 per cent margins for FY27, limiting incremental uplift. But we see higher upgrade to Street’s conservative estimates. Our FY27E EPS is now c.15 per cent above consensus. We continue to value the stock at 24 times 24-month forward EPS to arrive at our revised target of Rs 360. Recent correction in larger peers has narrowed the valuation gap, capping re-rating potential," JM Financial said.