Shares of Wipro Ltd plunged 5.04% to ₹263.75 on Tuesday after Motilal Oswal downgraded the stock to ‘Sell’, citing economic uncertainty and a weaker sector outlook.
The brokerage firm highlighted concerns over the diminished probability of US rate cuts, geopolitical risks, and cautious corporate sentiment, which could weigh on IT sector growth. As part of its revised outlook, Motilal Oswal lowered Wipro’s target price to ₹240, while also downgrading Infosys and L&T Technology Services (LTTS) to ‘Neutral’ with target prices of ₹1,650 and ₹5,100, respectively.
The report pointed out that corporate spending is yet to shift from capital expenditures (capex) to services, affecting revenue visibility. As a result, valuation multiples for FY26 have been revised downward, reflecting concerns over a potential slowdown in IT spending.
MOSL Technology Outlook
Sentiment in the IT sector has turned cautious from January to March, with enterprises adopting a “wait-and-watch” approach amid macroeconomic uncertainties. While GenAI adoption is progressing, it is yet to significantly impact IT services revenues.
The report emphasizes that clients are still prioritizing capital expenditures (capex) over services spending, limiting near-term growth potential. Analysts at Motilal Oswal favor bottom-up transformation and margin-driven businesses over discretionary spending-driven names.
As part of this assessment, the brokerage has made the following changes to IT stock ratings:
- Infosys downgraded to ‘Neutral’
- Wipro downgraded to ‘Sell’
- LTTS downgraded to ‘Neutral’
- Tech Mahindra upgraded to ‘Buy’
Forecasting for discretionary spending in FY26 remains uncertain, and analysts no longer expect a meaningful improvement in FY26 over FY25.
Revised Constant Currency (CC) Revenue Growth Estimates
| Company | FY26 Earlier Est. | FY26 Revised | FY27 Earlier Est. | FY27 Revised |
|---|---|---|---|---|
| TCS | 6.2% | 3.5% | 7.6% | 6.7% |
| Infosys | 7.3% | 5% | 8.3% | 7.4% |
| Wipro | 4.1% | 2.9% | 5.9% | 4.2% |
| HCL Tech | 6.6% | 5.3% | 8% | 7.3% |
| Tech Mahindra | 4.4% | 3.5% | 7.3% | 7.4% |
With ongoing pricing challenges and reduced discretionary spending, analysts expect continued volatility in IT stocks, keeping Wipro and its sector peers under pressure in the near term.
