Wipro Share Price Drops 4% After Q2 Results; Jefferies Flags ‘Unattractive’ Risk-Reward Ratio

Shares of Wipro fell sharply, by about 4.4%, after its Q2 results failed to impress the market. The drop reflects deep concerns about growth, margins, and guidance. To make things tougher, Jefferies called the stock’s risk-reward ratio “unattractive. We see that investors are not just reacting to one quarter’s numbers. They are asking whether Wipro can deliver more in a difficult global tech climate. In this article, we explore the numbers, the risks, and what may come next for the Wipro share.

Q2 Results: Small Gains, Big Disappointments

Key Figures

• Wipro posted ₹3,246 crore in consolidated net profit in Q2, up only ~1.2% year-on-year. 
• Revenue climbed ~1.7% YoY to ₹22,697 crore (≈ $2.58 billion).
• In its IT services segment, revenue in constant currency fell ~2.6% YoY. 
• Operating margin was 16.7%, hurt by a one-time provisioning for a client bankruptcy.

Comparisons & Missed Expectations

• Analysts had expected higher profit (PAT). Wipro’s results missed those estimates.
• Sequentially, profit declined ~2.5%. 
• Some of this weakness was blamed on a one-time charge due to a client default. 

So, yes, growth is there, but only marginally. And the headline numbers seemed weak compared to what many hoped for.

Why the 4% Drop? The Market Reacts Fast

• Muted growth and weak guidance
  The small rise in profits was overshadowed by weak forward guidance. Investors saw limited upside. 
• Margin pressure concerns
  The one-off charge raised alarms about how stable Wipro’s margins really are.
• Analyst downgrades and warnings
  That Jefferies line, “unattractive risk-reward”, added fuel to the sell-off.
• Sector headwinds
  Many IT firms are feeling weak discretionary spending and uncertain macro conditions. Wipro is not immune. 

Because of all this, the Wipro share became a top loser on the Nifty 50 that session.

Jefferies’ View: “Unattractive Risk-Reward Ratio”

Jefferies weighed in after the results. Their take:

• When you adjust for the one-time charge, the results are in line with expectations.
• They expect an EPS CAGR of ~3% over FY26–28. 
• They also see a ~3% dividend yield in that period. 
• Taken together, that limited growth + yield makes the stock less attractive. 
• Jefferies kept an Underperform rating, with a target around ₹220. 

Not everyone agrees. Some brokerages remain bullish, citing strong deal wins and long-term potential.

Broader Industry & Macro Setting

• The Indian IT sector is under pressure globally. Clients are cautious.
• Wipro’s peers, like Infosys, fared relatively better in Q2. Infosys saw ~2.9% YoY revenue growth. 
• Tariff uncertainty, budget cuts, and shifting priorities weigh on discretionary tech spend. 
• On the positive side, AI, automation, and digital transformation remain demand drivers. Wipro is pushing its “Wipro Intelligence” platform. 

So the environment is mixed. Growth pockets exist, but risks are real.

Wipro’s Strengths, Weaknesses & Competitive Position

Strengths & Opportunities

• Large deal momentum: Wipro secured deals > $500 million in Q2. 
• AI / digital push: Their platform strategy may help long-term phy diversity: Some regions like Europe and APMEA showed r, recovery signs. 

Weaknesses & Risks

• Weak revenue growth: Flat or negative in core segments.
• Margin vulnerability: One-off events hint at a low buffer.
• Heavy competition: Rivals like TCS, Infosys may outperform.
• Execution gap: Big deals must translate to stable revenue growth.

Compared to others, Wipro is seen as more volatile and less certain in its trajectory.

Stock Trends & Sentiment

• Over the past few months, Wipro has shown weakness, partly due to sector headwinds. 
• Foreign Institutional Investors (FIIs) have been cautious across tech names.
• Relative valuation to peers suggests Wipro is trading at lower multiples, but that’s tied to its growth concerns.
• On technical charts, some analysts see a sideways pattern, with resistance near ₹260–₹265.

Investor sentiment seems defensive: many are watching rather than buying aggressively.

Looking Ahead: Key Things to Watch

• Q3 guidance & management tone
  If Wipro gives a more confident outlook, it may ease fears.
• Margin trends
  Can they sustain or expand margins without one-offs?
• Execution of large deals
  The pipeline must convert into recurring revenue.
• Adoption of AI & digital solutions
  These will be growth engines. The speed of adoption is critical.
• Client spending behavior in core markets
  Especially in the U.S. and Europe.
• Competing performance
  How peers do will influence comparisons.

If Wipro delivers above expectations, it might revive the Wipro share’s appeal. But until then, the stock faces a guarded outlook.

Conclusion

The Wipro share fell ~4% after Q2 because the results were more modest than hoped. While the company showed strength in deal bookings and launched its AI platform, growth remains weak. Jefferies’ declaration of an “unattractive risk-reward” ratio added to the gloom. We believe the next few quarters will be crucial. If Wipro can stabilize margins, convert its deals, and raise optimism in its guidance, it may rebuild investor faith. Until then, the Wipro share remains under pressure in a tricky tech climate.

Disclaimer:

This content is for informational purposes only and is not financial advice. Always conduct your research.