Shares of Wipro Ltd traded slightly higher on Wednesday, gaining 0.65% to ₹263.30, even as most other Indian IT stocks came under pressure. The resilience comes after global brokerage Morgan Stanley upgraded Wipro’s stock to ‘Equal-weight’ from ‘Underweight’, while raising its target price to ₹265 from ₹216.
The brokerage firm, in its latest note titled “India Technology: IT Services,” said that although it sees a slight improvement in revenue growth forecasts for the sector, its broader thesis of two years of muted revenue CAGR remains intact.
Wipro was among the few large-cap IT firms to receive a positive revision. “We upgrade Wipro to EW (Equal-weight) with TP revised to ₹265 from ₹216,” Morgan Stanley stated, highlighting growing confidence in Wipro’s valuation versus peers.
In contrast, the brokerage downgraded Tech Mahindra to ‘Underweight’, despite slightly increasing its target price to ₹1,575 from ₹1,550, citing weak discretionary spending and limited vendor consolidation opportunities.
Sector outlook still cautious
Morgan Stanley said while the growth outlook has improved marginally, it remains cautious about the overall IT sector. It noted that the Nifty IT index has already declined nearly 10% in 2025.
“Valuation multiples, although below five-year averages, are not compelling given muted revenue and earnings growth,” the note added, advising investors to consider trimming positions in case of further rallies.
Stock preferences across the board:
-
Large-cap IT: TCS (Overweight), Infosys (Equal-weight), Wipro (Equal-weight)
-
Mid-cap IT: Coforge (Overweight), Mphasis (Equal-weight)
-
Less favored: HCL Tech, LTIMindtree (both Equal-weight), Tech Mahindra (Underweight), and ER&D players like Cyient and Tata Elxsi (both Underweight)
The note concluded that although management commentary and deal pipelines point to a slightly better outlook than feared earlier, discretionary IT spending continues to be sluggish and lacks near-term triggers for a broad re-rating of the sector.
