Wipro: Investors should await growth outperformance, margin gains

Wipro was lagging its peers in the past on the back of muted revenue growth, falling margins, loss of market share in deal renewals and pricing pressures

The stock of Wipro, the best performing tier-I information technology company over the past six months, was down close to 7 per cent on Wednesday. 

The Street believes that Wipro’s risk-reward trade-off might have turned unfavourable, given the sharp gains and higher valuation.

Suyog Kulkarni of Reliance Securities believes that the decline in the stock, which has gained over 40 per cent year-to-date, suggests an adjustment of risk-return trade-off from investors, considering its elevated valuation. 

At 19.2x its one-year forward estimates, the stock is not only trading at valuations that are the highest in 13 years, but is also at a 30 per