Wipro shares gain 4% post Q2 results, bonus issue news. Time to buy?

Shares of IT major Wipro surged by up to 4% on Friday, hitting a day’s high of Rs 550.55 on the Bombay Stock Exchange (BSE). The rally came after Wipro announced its second-quarter (Q2) results for the fiscal year 2025 (FY25), posting a 21.3% year-on-year (YoY) jump in net profit to Rs 3,209 crore.
Wipro’s strong performance surprised the market as it secured large contracts, with the total contract value (TCV) rising 8% on a quarterly basis. However, the company has guided for revenue growth to range between -2% and 0% quarter-on-quarter (QoQ) in constant currency terms for the third quarter, citing weak seasonality due to the furloughs and the holiday season in the December quarter.
Nomura expects Wipro’s USD revenue to decline by 2.1% YoY in FY25, with a rebound of 5.2% YoY growth in FY26. Despite challenges, Wipro’s IT EBIT margin saw a 30 basis points increase to 16.8% in Q2, supported by one month of salary hikes and ongoing optimisation efforts. Looking ahead, Nomura believes Wipro is on track to achieve its medium-term EBIT margin target of 17-17.5%, predicting an overall margin improvement of 130 basis points YoY to 16.5% in FY25. The brokerage has maintained a target price of Rs 670.
On the other hand, Jefferies, which has an underperform rating and a target price of Rs 465, pointed out broad-based revenue pressures and disappointing Q3 guidance. While Wipro’s management signalled potential growth in the banking, financial services, and insurance (BFSI) sector, Jefferies believes the weak guidance reflects a challenging outlook for the company.
Citi has a sell rating on Wipro with a target price of Rs 500. The brokerage described the quarter as decent, with both revenues and margins slightly above expectations. However, Citi cautioned that forward-looking indicators still seem weak, including the Q3 revenue guidance, which suggests a 1% QoQ decline at the midpoint, a 4.4% YoY headcount reduction, and an 11% YoY decline in total trailing twelve months (TTM) TCV.
Domestic brokerage Motilal Oswal has increased its FY25 earnings per share (EPS) estimate for Wipro by 2%, reflecting the margin beat. However, it has kept the FY26 and FY27 EPS estimates mostly unchanged. The firm maintained a neutral rating on the stock, with a target price of Rs 500, which implies a 20x multiple on September 2026 expected EPS.
Alongside its Q2 earnings, Wipro also announced a bonus issue of shares in the ratio of 1:1. This means that shareholders holding Wipro shares in their demat accounts as of the record date will receive one additional share for every share they hold. However, the company has yet to announce the record date for this bonus issue.
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