Wipro Earnings: Macro Uncertainty Continues to Impact Customer Discretionary IT Spending

We are maintaining our INR 450 fair value estimate for narrow-moat Wipro after the firm closed out fiscal 2024 with financial results impacted by a slowdown in customer spending on IT services as macro uncertainty persists. The slowdown in customer spending is not unique to Wipro. The firm’s closest competitors, Infosys and Tata Consultancy Services, also reported weak results and outlooks over the last week, as customers continue to delay projects that are more discretionary in nature. While the near-term picture remains murky, we reiterate our confidence in Wipro’s long-term opportunity as secular tailwinds such as digital transformations, cloud migrations, and increased usage of AI stand to drive strategic demand for IT services vendors such as Wipro.