Shares of a prominent Indian IT services company, Wipro, faced significant selling pressure today after a disappointing revenue guidance for the first quarter of the fiscal year 2026 (Q1FY26). The weak outlook prompted leading market analyst Anil Singhvi to recommend that investors sell the stock.
Wipro’s Q4FY25 earnings, announced yesterday, showed a mixed performance. While the company reported a 25.9% year-on-year jump in net profit to ₹3,570 crore, its revenue growth was muted at 1.3% year-on-year, reaching ₹22,504 crore. In dollar terms, the revenue declined by 1.2% to $2.59 billion.
The primary trigger for the negative sentiment surrounding the stock was the company’s guidance for the IT services segment revenue in Q1FY26, which is projected to be between $2,505 million and $2,557 million. This translates to a sequential decline of 1.5% to 3.5% in constant currency terms. The company cited global macroeconomic uncertainties and the impact of US tariffs as factors weighing on client spending and project initiations.
Anil Singhvi’s Bearish Stance
Anil Singhvi, Managing Editor of Zee Business, expressed a bearish view on Wipro and the broader IT sector following the company’s earnings and guidance. He highlighted that Wipro’s weak outlook signals potentially bleak prospects for other high-revenue IT companies, particularly those with significant exposure to the US market.
As part of his “Stock of the Day” pick, Singhvi explicitly recommended selling Wipro futures. He provided specific targets for the downside at ₹240, ₹235, and ₹232, suggesting a potential fall of over 6% from yesterday’s closing price. To manage risk, he advised a stop loss at ₹250 per share.
“After the weak set of earnings with still further disappointing guidance, I have turned bearish on the IT pack as a whole,” Singhvi said in his analysis. He further advised investors to completely refrain from IT stocks and avoid any buying in the current scenario.
Market Reaction and Broader IT Sector Impact
The market reacted sharply to Wipro’s results and the negative commentary. In today’s trading session, Wipro’s shares tumbled by over 6%, hitting an intraday low of ₹232.15 on the National Stock Exchange (NSE). This significant drop also weighed heavily on the Nifty IT index, which saw a decline of over 2%.
Other IT stocks also came under pressure, reflecting the overall negative sentiment towards the sector. Heavyweights like Infosys, whose Q4 results are due later today, Tata Consultancy Services (TCS), and HCL Technologies traded lower by 0.5% to 1.5%. Sonata Software also witnessed a sharp decline of 12% after issuing a revenue warning for its international business.
Analysts have expressed concerns that the cautious outlook from Wipro could be indicative of broader challenges within the IT services industry, including slower deal closures, delays in project ramp-ups, and reduced discretionary spending by clients amidst global economic headwinds and geopolitical tensions, particularly the ongoing US-China trade dynamics.
Wipro Management’s Commentary
Wipro’s CEO, Srini Pallia, acknowledged the global uncertainties impacting client spending. He stated that the company is focused on partnering closely with clients while remaining committed to consistent and profitable growth. He also mentioned the company’s ongoing investments in global talent and building capabilities in consulting and Artificial Intelligence (AI).
Despite the weak near-term guidance, Wipro highlighted some positives from Q4FY25, including large deal wins worth $1.76 billion. The company aims to maintain margins by improving utilization, enhancing fixed-price productivity, and rationalizing overhead costs. However, the management also noted a deterioration in client spending towards the end of Q4, suggesting a potentially more significant impact in the current quarter (Q1FY26).
Analyst Downgrades and Revised Targets
Following Wipro’s earnings announcement, several brokerages have also downgraded the stock and revised their target prices downwards. Concerns have been raised about the company’s growth outlook for FY26 and the potential derailment of its turnaround narrative if the weakness persists.
Nuvama Institutional Equities downgraded Wipro to “hold” from “buy,” significantly reducing the target price from ₹300 to ₹260. Bernstein maintained its “underperform” rating with a target price of ₹200, citing that the Q4 numbers missed expectations and lacked near-term positive catalysts. Choice Broking also downgraded the stock to “reduce” with a revised target of ₹252, pointing to macro-sensitive client behavior as a key concern.
Investor Strategy
Given the current negative sentiment and analyst recommendations, investors holding Wipro shares may consider the advice to sell, especially if their investment horizon is short-term. The stop-loss suggested by Anil Singhvi at ₹250 can act as a crucial level to limit potential losses.
For those considering fresh investments in the IT sector, a cautious approach is advisable. It would be prudent to monitor the upcoming earnings announcements and guidance from other major IT players like Infosys and TCS to get a clearer picture of the overall industry landscape. Investors should also pay close attention to global macroeconomic developments and their potential impact on IT spending.
In conclusion, Wipro’s disappointing Q1FY26 revenue guidance has triggered a sell-off in its stock, with Anil Singhvi recommending a “sell” strategy with specific targets and a stop loss. The weak outlook has also cast a shadow on the broader IT sector, prompting investors to reassess their positions in IT stocks amid prevailing global economic uncertainties.
