Shares of Bengaluru-based IT services provider Wipro Ltd. soared by up to 4% on Friday, making it the top gainer on the Nifty 50 index following a major contract win in the US announced on Thursday. In an exchange filing, Wipro revealed that it had secured a contract from a prominent US communication services provider for managed services and industry-specific solutions.
The $500 million deal is expected to span five years. However, Wipro did not disclose the name of the communication service provider.
Brokerage firm Morgan Stanley commented that this substantial US deal is a positive development, particularly given the current tight discretionary spending environment. They noted that while such large contracts enhance revenue growth visibility, Wipro’s short-term growth might still lag behind its peers. Consequently, the price-to-earnings multiple gap between Wipro and its competitors is likely to remain significant until this growth disparity is addressed.
Out of the 45 analysts covering Wipro, 23 have issued a “sell” or equivalent rating on the stock, 13 have a “hold” rating, and only nine have a “buy” recommendation. Morgan Stanley also maintains an “underweight” rating on Wipro with a price target of ₹421, suggesting a potential 12% downside from current levels.
Currently, Wipro shares are trading 3.6% higher at ₹477.55, maintaining their position as the top gainers on the Nifty 50 index.
