Wipro share price jumps over 5% after Q2 results, bonus announcement. Should you buy?

Wipro share price jumped over 5% in early trade on Friday after the IT major reported decent earnings for the second quarter of FY25 and announced a bonus share issue. Wipro shares gained as much as 5.34% to a high of ₹557.05 apiece on the BSE.

The fourth largest software services exporter in India, Wipro reported IT services revenue of ₹22,196 crore in the quarter ended September, registering a growth of 1.4% from ₹21,896.3 crore in the previous quarter. USD revenue rose 1.3% sequentially to $2,660 million in Q2FY25 from $2,625.9 million. Large deal bookings were up 28.8% QoQ at $1.5 billion.

Wipro’s IT services EBIT increased 3.5% to ₹3,732 crore from ₹3,605.7 crore, while EBIT margin improved by 30 bps to 16.8% from 16.5%, QoQ.

The company expects IT services revenue to be in the range of $2,607 million to $2,660 million for Q3FY25, translating to sequential guidance of -2.0% to 0.0% in constant currency terms.

The board of directors of Wipro also announced a bonus share issue in the ratio of 1:1.

What analysts say?

According to brokerage firm Nomura, Wipro Q2 results beat all parameters. While large deal win momentum was strong in Q2, the guidance for December quarter reflects weak seasonality.

It has a ‘Buy’ rating on Wipro with a target price of ₹680 per share.

Antique Stock Broking noted that although Wipro’s Q3 revenue is expected to be weak, the company remains confident in its ability to keep margins within a stable range despite two months of wage hike.

“Wipro's revenue growth over the past 5-6 quarters has underperformed its large peers due a higher than expected decline in consulting and discretionary. The company did suggest that its overall business looks to be improving gradually, however, guidance suggests muted growth in the next quarter as well. We continue to value Wipro at 22x FY27 EPS, which is at a 15% discount compared to its peers-Infosys and HCL Technologies,” Antique Stock Broking said.

Post the weak Q3 guidance, the brokerage firm reduced its revenue forecast by 1%-2% for FY26 / FY27, while it reduced EPS estimates by 2%-3%. It maintained a ‘Hold’ rating on Wipro shares and kept the target price unchanged at ₹575 apiece.

At 9:45 am,  Wipro shares were trading 4.39% higher at ₹552.00 apiece on the BSE.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.