Wipro Ltd. Valuation Shifts Signal Renewed Price Attractiveness Amid Market Challenges

Valuation Metrics Reflect Improved Price Attractiveness

Wipro’s current price-to-earnings (P/E) ratio stands at 16.70, a figure that positions it favourably against major industry peers such as Tata Consultancy Services (TCS) and Infosys, which trade at P/E multiples of 18.96 and 19.21 respectively. This lower P/E multiple indicates that Wipro’s shares are priced more conservatively relative to its earnings potential, potentially offering value to investors seeking exposure to the Computers - Software & Consulting sector.

Similarly, the price-to-book value (P/BV) ratio of 2.59 underscores a valuation that remains attractive when benchmarked against the sector’s broader valuation spectrum. While not as low as some historically undervalued levels, this P/BV ratio suggests that the market is assigning a reasonable premium to Wipro’s net asset base, reflecting confidence in its asset utilisation and growth prospects.

Comparative Sector Analysis Highlights Relative Value

When compared with peers, Wipro’s valuation metrics stand out for their relative moderation. For instance, HCL Technologies, another key player in the sector, is rated as Fair with a P/E of 22.92 and an EV/EBITDA multiple of 13.99, both significantly higher than Wipro’s 10.65 EV/EBITDA. Meanwhile, companies like LTI Mindtree and Tech Mahindra are classified as Expensive and Very Expensive respectively, with P/E ratios nearing 28 and 30, indicating stretched valuations in the mid-cap segment.

This comparative framework suggests that Wipro’s shares may offer a more balanced risk-reward profile, especially for investors wary of overpaying in a sector where valuations have expanded considerably over recent years.

Financial Performance and Quality Metrics Support Valuation

Wipro’s return on capital employed (ROCE) of 29.63% and return on equity (ROE) of 15.77% reflect robust operational efficiency and shareholder value creation. These figures are particularly noteworthy given the company’s current valuation grade upgrade from very attractive to attractive, signalling that the market is beginning to price in these strengths more favourably.

Additionally, the dividend yield of 5.21% offers an appealing income component for investors, especially in a low-interest-rate environment. This yield is competitive within the sector and adds to the total return potential of holding Wipro shares.

Market Performance and Price Movements

Despite these positive valuation signals, Wipro’s stock price has faced headwinds, with a day change of -0.35% and a year-to-date return of -19.80%, underperforming the Sensex’s modest 3.19% gain over the same period. Over the longer term, however, the stock has delivered a 10-year return of 105.84%, demonstrating resilience and growth potential despite cyclical volatility.

The stock’s 52-week high of ₹316.50 contrasts sharply with its current price near ₹211.25, indicating a significant correction that has contributed to the improved valuation attractiveness. This price contraction may present a tactical opportunity for value-oriented investors willing to navigate near-term uncertainties.

Mojo Grade Downgrade Reflects Caution Amid Sector Challenges

MarketsMOJO has downgraded Wipro’s Mojo Grade from Hold to Sell as of 17 Feb 2026, reflecting a more cautious stance on the stock’s near-term prospects. The Mojo Score of 47.0 corroborates this view, suggesting that while valuation metrics have improved, other factors such as competitive pressures, margin sustainability, or macroeconomic headwinds may weigh on the stock’s momentum.

Investors should weigh these considerations carefully, balancing the attractive valuation against the broader sector and company-specific risks.

Historical Returns Contextualise Current Valuation

Examining Wipro’s returns relative to the Sensex over various time horizons reveals a mixed performance picture. The stock has underperformed the benchmark over the past one year (-32.73% vs. Sensex’s +8.64%) and year-to-date (-19.80% vs. +3.19%). However, over a three-year period, Wipro has delivered a modest 4.01% return compared to the Sensex’s 35.24%, and over ten years, it has generated a substantial 105.84% gain, albeit trailing the Sensex’s 247.96%.

This long-term outperformance, despite recent setbacks, supports the notion that Wipro remains a fundamentally sound company with potential for recovery and growth, especially if valuation multiples revert towards historical norms.

Valuation Outlook and Investor Implications

Wipro’s shift from very attractive to attractive valuation status signals a nuanced change in market sentiment. While the stock is no longer at deeply discounted levels, it remains favourably priced relative to many peers, particularly in the context of its strong ROCE and dividend yield. Investors seeking exposure to the Indian IT services sector may find Wipro’s current valuation compelling, especially if they prioritise quality metrics and income generation.

However, the recent downgrade in Mojo Grade to Sell advises caution, suggesting that investors should monitor sector developments, earnings trends, and competitive dynamics closely before committing fresh capital.

In summary, Wipro’s valuation parameters indicate a more attractive price point than many peers, supported by solid financial metrics and a reasonable dividend yield. Yet, the stock’s recent price weakness and cautious analyst stance underscore the importance of a balanced, well-informed investment approach.

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