Wipro Ltd. is Rated Hold by MarketsMOJO

Current Rating and Its Significance

MarketsMOJO’s 'Hold' rating for Wipro Ltd. indicates a neutral stance on the stock, suggesting that investors should neither aggressively buy nor sell at this juncture. This rating reflects a balanced view of the company’s strengths and challenges, signalling that while Wipro remains a solid player in the software and consulting sector, certain factors temper its near-term upside potential. The rating was revised on 19 January 2026, with the Mojo Score declining from 75 to 68, reflecting a more cautious outlook.

Quality Assessment

As of 25 January 2026, Wipro maintains a good quality grade, underpinned by strong management efficiency and robust return metrics. The company boasts a high return on equity (ROE) of 16.48%, signalling effective utilisation of shareholder capital. Additionally, Wipro’s debt-to-equity ratio remains at a conservative zero, indicating a debt-free balance sheet that reduces financial risk and enhances stability. These factors contribute positively to the company’s overall quality profile, reassuring investors about its operational soundness.

Valuation Perspective

Wipro’s valuation is currently very attractive. The stock trades at a price-to-book value of 2.9, which is reasonable relative to its sector peers and historical averages. Despite the stock’s underperformance over the past year, with a return of -24.96%, the company’s profits have grown by 7% during the same period. This divergence suggests that the market may be undervaluing the company’s earnings potential. Furthermore, the stock offers a compelling dividend yield of 4.6%, providing income-oriented investors with an additional incentive to hold the shares. The PEG ratio stands at 2.8, reflecting moderate growth expectations relative to its price.

Financial Trend Analysis

The financial trend for Wipro is currently flat, indicating limited growth momentum. Over the last five years, operating profit has grown at an annualised rate of just 5.44%, which is modest for a large-cap software company. Recent quarterly results as of December 2025 show subdued performance metrics, including a low operating profit to net sales ratio of 18.24% and a profit before tax (excluding other income) of ₹3,128.60 crores. Additionally, the debtor turnover ratio stands at 7.56 times, the lowest in recent periods, suggesting some challenges in working capital management. These factors collectively point to a period of consolidation rather than expansion.

Technical Outlook

From a technical standpoint, Wipro’s stock exhibits a mildly bullish trend. Despite recent short-term declines—such as a 0.98% drop on the latest trading day and a 10.81% fall over the past week—the stock has shown resilience over the last three months with a relatively modest 2.48% decline. However, the six-month and year-to-date returns remain negative at -8.80% and -9.51% respectively, reflecting broader market pressures and sector-specific headwinds. The stock’s underperformance relative to the BSE500 index, which has delivered 5.14% returns over the past year, highlights the cautious sentiment among investors.

Investor Implications

For investors, the 'Hold' rating suggests maintaining existing positions while monitoring the company’s progress closely. Wipro’s strong balance sheet and attractive valuation provide a cushion against volatility, but the flat financial trend and recent underperformance caution against aggressive accumulation. Income-focused investors may find the dividend yield appealing, while growth-oriented investors might await clearer signs of operational acceleration before increasing exposure.

Sector and Market Context

Operating within the Computers - Software & Consulting sector, Wipro faces intense competition and evolving client demands. The sector has generally experienced robust growth, but Wipro’s modest profit growth and stock price weakness indicate challenges in capturing market share or scaling margins effectively. The company’s promoter majority ownership provides stability, but investors should weigh sector dynamics and company-specific fundamentals when considering their investment horizon.

Summary

In summary, Wipro Ltd.’s current 'Hold' rating by MarketsMOJO reflects a nuanced view of the company’s position as of 25 January 2026. The stock’s strong quality metrics, including high ROE and zero debt, are balanced by flat financial trends and recent underperformance relative to the broader market. Valuation remains attractive, supported by a solid dividend yield and reasonable price-to-book ratio. Technical indicators suggest mild bullishness but also caution given recent price declines. Investors should consider these factors carefully, recognising that the 'Hold' rating advises a measured approach rather than aggressive buying or selling.

Looking Ahead

Going forward, Wipro’s ability to improve operating profit growth and capitalise on sector opportunities will be key to shifting the rating towards a more positive outlook. Monitoring quarterly earnings, margin trends, and market sentiment will be essential for investors seeking to reassess their positions. For now, the 'Hold' rating serves as a prudent guide amid a complex and evolving market environment.

Key Metrics at a Glance (As of 25 January 2026)

Mojo Score: 68.0 (Hold)

ROE: 16.48%

Debt to Equity: 0

Operating Profit Growth (5-year CAGR): 5.44%

Price to Book Value: 2.9

Dividend Yield: 4.6%

1-Year Stock Return: -24.96%

BSE500 1-Year Return: 5.14%

Conclusion

Wipro Ltd. remains a significant player in the software and consulting sector with solid fundamentals and an attractive valuation. The 'Hold' rating reflects the current balance of strengths and challenges, advising investors to maintain positions while awaiting clearer signs of growth acceleration or market re-rating.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →