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The brokerage has maintained its price target at ₹303, which is nearly the same as the stock’s closing price on Wednesday.
CLSA said that it has downgraded Wipro due to the recent stock outperformance. Shares have risen 3% in the last one month and 14% since CLSA had issued the “double upgrade” on July 1 last year.
The brokerage expects Wipro to remain a laggard in quarter that ended on December 31, as it expects its Constant Currency growth to remain flat on a sequential basis, which is at the top end of the guidance.
Wipro saw earnings downgrades of 1% in 2024, but its price-to-earnings ratio re-rated from 19.7x to 24.4x. The stock too gained 30% during the year, and was among the outperformers within the largecap IT segment.
CLSA wrote in its note that the next leg of re-rating for Wipro can happen only if it starts growing in-line with its other largecap peers. However, the signs of that currently remain elusive, according to the brokerage.
Wipro is yet to announce the date on which it will be declaring its December quarter results.
Out of the 45 analysts that have coverage on Wipro, 25 of them currently have a “sell” recommendation on the stock, while only nine of them have a “buy” rating. The other 11 analysts recommend “holding” on to the stock.
Shares of Wipro ended 0.4% lower on Wednesday at ₹300.6. The stock had gained close to 30% in 2024.
