Wipro has been upgraded by Nuvama Institutional Equities to a 'Buy' rating from 'Hold,' with the target price raised to Rs 700 from Rs 520, indicating a potential upside of 20% from the previous close.
The upgrade is due to Wipro's favorable portfolio mix, new leadership under CEO Srini Pallia, and attractive valuations that present a compelling risk-reward profile.
Despite a year-to-date gain of 20%, Wipro's shares were trading 1.6% lower at Rs 573 as of 11:10 AM. However, the company has shown consistent monthly gains since June 2024.
Wipro's significant exposure to discretionary spending, which constitutes 60-65% of its revenue, has previously made it a laggard amid spending cuts. Nevertheless, Nuvama anticipates a revival in discretionary spending following the Federal Reserve's interest rate cut in September 2024 and improving macroeconomic conditions in the U.S., which could benefit Wipro in the future.