Wipro ADR Drops 17% as JPMorgan Cuts Its Target to $1.70

Wipro’s American Depositary Receipt fell 16.89% to $1.870 on the NYSE in overnight trade on July 1, 2026, even as Infosys, Cognizant and Accenture ADRs rallied in the same session. The common catalyst, per BusinessToday, was Anthropic’s confirmation that the US Commerce Department had lifted export controls on its Fable and Mythos AI models. JPMorgan reinforced the move by reaffirming its Underweight rating on Wipro and trimming its ADR target to $1.70 from $2.20, citing AI-led pricing pressure.

The split-screen session put a number on a question Indian IT investors have been asking for a year: which large-cap names are actually repositioning for AI-native demand, and which are still running the legacy billable-hour model that the technology is now eroding. Wipro closed the night in the second camp, with FY26 constant currency IT services revenue down 1.6%.

The Overnight Drop

Wipro’s ADR closed the overnight session at $1.870, down 16.89% on the NYSE. The single-session move was the sharpest for any major Indian IT services name in the period covered by the BusinessToday report, and the lowest ADR print for Wipro so far in 2026. Peers traded sharply higher by the same session’s end.

Infosys ADRs gained 1.53% to $10.65, Cognizant Technology Solutions ADRs climbed 6.04% to $41.07, and Accenture Plc ADRs advanced 5.38% to $131.13, per BusinessToday’s market data. The trigger for those moves was the same AI catalyst that bypassed Wipro: Anthropic confirmed the US Commerce Department had lifted export controls on its most advanced Fable and Mythos AI models, restoring access to those tools for global buyers. That is the gap a $2,583 million Q4 FY26 revenue print could not bridge on its own. The bigger backdrop is a year of compression, with Wipro shares down 19% in the past month and 36% in 2026 so far, per BusinessToday’s market data. The divergence shows the market treating AI readiness as the differentiator between Indian IT names that used to move together.

The July 1 move came ahead of Wipro’s Q1 FY27 earnings, due later this month. Brokerage MOFSL, in a Q1 preview note, expects Wipro’s IT services to decline 1.3% sequentially in constant currency, with margins contracting by 110 basis points to 16.1%. The preview cited delayed deal ramp-ups, weakness in one large client and softer US banking, financial services and insurance demand.

What JPMorgan Actually Said

JPMorgan downgraded Wipro from Neutral to Underweight and lowered its ADR target price to $1.70 from $2.20 in a research note circulated around late June, per the Financial Express summary. The brokerage’s earnings estimates for Wipro were cut by 1% to 5%, reflecting weaker revenue expectations. The target valuation multiple shrank to 12x from 15x. JPMorgan told clients to expect Wipro to guide for sequential revenue growth of -2% to 0% in Q2 FY27.

The move was part of a wider sector cut that also touched HCL Tech and Tata Technologies. JPMorgan cut valuation multiples across its Indian IT coverage and now expects large-cap IT companies to deliver revenue growth of only 3% to 4% over the medium term. The brokerage described the industry as being in the “deflation” phase of AI adoption.

JPMorgan’s channel checks pointed to delays in deal closures, slower project ramp-ups and continued client indecision amid geopolitical uncertainty and rapid AI-led changes. Following Accenture’s weaker guidance, JPMorgan expects Infosys, HCL Tech and Wipro to lower or soften their FY27 guidance. The cuts reflect what the brokerage called a more gradual recovery in medium-term growth rather than company-specific weakness for names it still likes. For Wipro specifically, JPMorgan expects continued lagging of peers on growth as demand remains weak. The brokerage sees the stock as not yet fully reflecting the downside risk despite its correction this year.

JPMorgan’s pecking order inside Indian IT now tilts toward names it rates Overweight: Tata Consultancy Services, Infosys, Tech Mahindra, Coforge, Persistent and Sagility. HCL Tech was cut to Underweight alongside Wipro, with a target of Rs 1,000 implying about 10% downside. The brokerage kept Overweight calls on Coforge (target Rs 1,800, about 22% upside), Mphasis (target Rs 2,600, about 16% upside) and Infosys (target Rs 1,200, about 17% upside).

Where the AI Catalyst Missed Wipro

Anthropic’s Fable and Mythos AI models are back in global circulation after the US Commerce Department lifted the export controls that had blocked their sale to foreign buyers. For IT services firms tied to enterprise AI deployments, restoring access to frontier models is a positive demand signal. For Wipro, the news did not move the needle.

Indian IT’s larger players have spent the past two quarters repositioning their service lines around generative and agentic AI, including the joint push behind Infosys, TCS and Wipro scaling Copilot past 300,000 seats as each firm pushes AI tools into delivery. The market read Anthropic’s restored access as confirmation that demand for AI-augmented services has not collapsed. Peers with stronger AI delivery records caught the bid. Wipro, with constant currency IT services revenue down 0.2% year on year in Q4 FY26, did not.

Wipro’s FY26 constant currency IT services revenue declined 1.6% year on year, the firm disclosed in its April 16 results release. That is a recessionary print for a sector that used to grow in double digits. JPMorgan’s deflation framing captures the gap: AI is compressing the billable-hour model that Indian IT was built on, before any new AI-native revenue stream has reached the scale to offset it. For Wipro specifically, the FY26 large deal bookings print of $7.8 billion, up 45.4% in constant currency, points to a healthy pipeline. It does not yet show the same shape in revenue, and the market is pricing the lag, not the pipeline.

Wipro’s Own Numbers

Wipro reported Q4 FY26 results on April 16, 2026 in its Q4 and full-year FY26 results press release. Gross revenue was ₹242.4 billion ($2,583 million) for the quarter, up 2.9% sequentially and 7.7% year on year. IT services segment revenue came in at $2,651 million, up 0.6% sequentially and 2.1% year on year, with constant currency IT services revenue rising 0.2% sequentially and falling 0.2% year on year.

Operating metrics showed a mixed picture. IT services operating margin for Q4 FY26 came in at 17.3%, down 0.3% sequentially and 0.2% year on year. Voluntary attrition was 13.8% on a trailing twelve-month basis, broadly stable. Net income for the quarter was ₹35.0 billion ($373.2 million), up 12.3% sequentially and down 1.9% year on year. Large deal bookings, the metric that signals future revenue, hit $1,440 million for the quarter, up 65.1% sequentially in constant currency, while total bookings were $3,455 million, up 3.2% sequentially in constant currency.

• Q4 FY26 gross revenue: ₹242.4 billion ($2,583 million), +2.9% QoQ, +7.7% YoY
• Q4 IT services revenue: $2,651 million, +0.6% QoQ, +2.1% YoY
• Q4 constant currency IT services growth: +0.2% QoQ, -0.2% YoY
• Q4 IT services margin: 17.3%, -0.3% QoQ, -0.2% YoY
• FY26 large deal bookings: $7.8 billion, +45.4% YoY in constant currency

The full-year FY26 print was softer. Gross revenue reached ₹926.2 billion ($9.9 billion), up 4.0% year on year, but IT services revenue was $10,478.1 million, down 0.3% year on year. Constant currency IT services revenue fell 1.6% year on year for the year, a contraction that tracks the AI deflation JPMorgan now sees spreading across the sector. Operating cash flow held at 112.6% of net income for the full year, a sign the cash machine is still running.

Wipro’s outlook for the quarter ending June 30, 2026 is revenue from IT services of $2,597 million to $2,651 million, a sequential guidance range of -2.0% to 0% in constant currency. That range sits at the lower end of where consensus had marked Q1, and JPMorgan’s framework says to expect softer still.

The Buyback Against the Deflation

Advancements in AI are reshaping client priorities and creating new opportunities for us to partner more deeply to deliver value-driven outcomes. To strengthen our position in an AI-first world, we are pivoting to a services-as-a-software model through the AI Native Business & Platforms unit.

That statement came from Wipro CEO and Managing Director Srini Pallia in the firm’s Q4 FY26 release. The same release approved a buyback of up to ₹15,000 crore ($1.6 billion) at ₹250 per share, covering up to 60 crore equity shares, equal to 5.7% of paid-up capital, and the largest buyback in Wipro’s history. The record date was set for June 5, 2026 and the tender closed on June 17. Two months later, Wipro paired the buyback with a ServiceNow agentic AI deal in Wipro’s ServiceNow agentic AI deal paired with the buyback. The capital return and the AI partnership were the two halves of Wipro’s repositioning push through the spring.

MOFSL’s Q1 preview sees further compression coming, with margins under pressure from wage hikes, lower-margin deal ramp-ups and AI investments of Wipro’s own. That puts the buyback’s value-add in question: a ₹15,000 crore capital return can mask a slow-growth year, but it cannot replace the need for revenue to inflect. JPMorgan’s guidance assumption of -2% to 0% sequential growth for Q2 FY27 suggests the buyback will be doing the heavy lifting for some time.

The structural pressure sits beyond Wipro. JPMorgan’s Indian IT sector note expects large-cap IT firms to deliver 3% to 4% revenue growth over the medium term, well below the historical 7% to 10% range. The first-half recovery the market usually looks for is unlikely to materialise this year, the brokerage said. Wipro’s buyback is a credible capital allocation choice, but it is not a substitute for a growth re-acceleration, and the July 1 ADR move showed the market pricing the gap.

The Sector Calculus

The Wipro downgrade is one line in a broader rerating of Indian IT. JPMorgan downgraded HCL Tech to Underweight alongside Wipro and trimmed its target to Rs 1,000, implying about 10% downside, per the same Financial Express note. The brokerage also trimmed its target on Tata Technologies.

• Tata Consultancy Services (TCS): Overweight, preferred top pick
• Infosys: Overweight, target Rs 1,200, about 17% implied upside
• Tech Mahindra: Overweight, preferred top pick
• Coforge: Overweight, target Rs 1,800, about 22% implied upside
• Mphasis: Overweight, target Rs 2,600, about 16% implied upside
• Persistent: Overweight, preferred top pick
• Sagility: Overweight, preferred top pick
• HCL Tech: Underweight, target Rs 1,000, about 10% implied downside
• Wipro: Underweight, ADR target $1.70 from $2.20

The pecking order places Wipro in the bottom tier alongside HCL Tech, with JPMorgan preferring firms it sees as having stronger execution or relatively resilient growth profiles. For Wipro, the bridge from here to a higher multiple requires revenue to inflect, not capital return. The first test will be the Q1 FY27 print later this month and the FY27 guidance Wipro sets with it. JPMorgan’s framework says to expect that guidance to soften.

Frequently Asked Questions

What did JPMorgan say about Wipro?

JPMorgan cut Wipro from Neutral to Underweight and reduced its ADR price target to $1.70 from $2.20, per a Financial Express summary of the broker’s note. The brokerage trimmed its earnings estimates by 1% to 5% and shrank its target valuation multiple to 12x from 15x. It also expects Wipro to guide for sequential revenue growth of -2% to 0% in Q2 FY27.

Why did Wipro ADR fall while peers rallied?

Wipro’s ADR fell 16.89% to $1.870 on July 1, 2026, while Infosys ADRs gained 1.53%, Cognizant ADRs rose 6.04% and Accenture ADRs climbed 5.38% in the same session, per BusinessToday. The market read Anthropic’s export-control lift as a positive AI demand signal, lifting AI-exposed peers but bypassing Wipro, where FY26 constant currency IT services revenue fell 1.6%.

How big is the ₹15,000 crore Wipro buyback?

Wipro’s board approved the buyback on April 16, 2026, at ₹250 per share for an aggregate amount not exceeding ₹150 billion ($1.6 billion). The tender offer covered up to 60 crore equity shares, equal to 5.7% of paid-up equity capital. The size makes it the largest buyback in the company’s history. The buyback’s record date was set for June 5, 2026 and the tender closed on June 17.

What is Wipro’s FY27 revenue outlook?

For the quarter ending June 30, 2026, Wipro guided IT services revenue to $2,597 million to $2,651 million, a sequential range of -2.0% to 0% in constant currency. JPMorgan expects Wipro to soften this guidance further when Q1 FY27 results land later this month. Brokerage MOFSL, in its own preview, sees Q1 IT services declining 1.3% sequentially in constant currency, with margins contracting 110 basis points to 16.1%.

How does Wipro compare to TCS and Infosys now?

JPMorgan prefers Tata Consultancy Services, Tech Mahindra, Coforge, Persistent and Sagility, and maintains Overweight calls on Infosys (target Rs 1,200) and Mphasis (target Rs 2,600). Wipro sits in the bottom tier alongside HCL Tech, both at Underweight, with the pecking order reflecting JPMorgan’s view that AI-led productivity gains remain a near-term headwind for traditional IT services.

Disclaimer: This article is for informational purposes only and is not investment advice. Investing in equities, particularly in the technology services sector, carries significant risks including market volatility, sector-specific disruption, currency fluctuations, and geopolitical uncertainty. Figures and outlooks are accurate as of publication and may change. Readers should consult a qualified financial advisor before making investment decisions.