Wipro on the rise: New revenue forecasts boost stock

Shares of the Indian IT service provider Wipro rose by about 8% on Monday, marking the strongest price increase in nearly four years. As the fourth-largest IT service provider in India, it signals, along with its industry peers, a revival in demand. After the company exceeded its revenue and profit estimates for the third quarter on Friday, CEO Srinivas Pallia expressed confidence: 'We see discretionary spending slowly returning,' despite the economic challenges in 2024. Wipro's shares were among the biggest percentage gainers in the Nifty 50 index, which otherwise remained unchanged. According to LSEG data, at least eight brokerage firms upgraded their rating of Wipro's stock, while 16 revised their price targets upwards. Analysts at Jefferies noted a recovery in discretionary spending in Wipro's BFSI segment (banking, financial services, and insurance), resulting in an 11% year-over-year revenue growth. This prompted them to raise both their rating and the price target for the stock. The BFSI segment contributes about one-third to the company's total revenue, and the optimistic scenario for 2025 aligns with similar assessments from larger competitors such as TCS, Infosys, and HCLTech. The Indian IT services sector, valued at $254 billion, faced several quarters of stagnant growth due to global macroeconomic uncertainties and inflationary challenges, prompting clients to cut back on their spending.