Shares of Wipro Ltd fell nearly 7 percent in early trade on Monday, extending a prolonged period of underperformance, after the company’s Q3 FY26 results failed to reassure markets on near-term growth. While headline numbers showed operational stability, the softer-than-expected revenue guidance for the March quarter became the defining trigger for the sell-off.

The stock slipped to around ₹249, taking its one-year decline to over 17 percent. In comparison, the broader Nifty 50 has gained roughly 10 percent over the same period, underlining how investors have consistently penalised Wipro for weaker growth visibility relative to peers.

Wipro has spent the last several quarters attempting to stabilise its business amid a global slowdown in discretionary technology spending. Large clients in banking, financial services, and retail have remained cautious on new IT projects, delaying decision-making and slowing deal ramp-ups. Against this backdrop, markets have become particularly sensitive to any signal on forward demand rather than backward-looking performance.

This sensitivity was visible again after the company announced its results for the quarter ended December 31, 2025, through its exchange filing. While there was no operational shock in Q3 numbers, the guidance commentary proved to be the decisive factor.

For Q3 FY26, Wipro reported consolidated net profit of ₹3,119 crore, down 4 percent sequentially and 7 percent year-on-year. IT services revenue came in at ₹23,378 crore, rising 3.3 percent quarter-on-quarter but falling short of Street expectations. Management highlighted disciplined cost control and strong cash generation, indicating that internal levers on margins remain intact.

However, the company guided for IT services revenue in the range of $2.635 billion to $2.688 billion for the March quarter. This translates into sequential growth of 0 percent to 2 percent in constant currency terms - a band that the market viewed as conservative in an environment where investors were hoping for early signs of demand revival.

The guidance effectively reset expectations for near-term acceleration and reinforced concerns that deal momentum remains uneven.

In the Indian IT sector, valuation multiples are closely tied to growth confidence. Even modest downgrades to revenue outlook tend to have an outsized impact on stock prices, particularly for companies already facing credibility challenges on execution and deal conversion.

Wipro’s guidance suggests that while the business is stable, it is not yet positioned for a decisive growth upcycle. For institutional investors, this raises questions about opportunity cost, especially when capital can be rotated into peers with clearer demand traction.

The market reaction also highlights that margin stability alone is no longer sufficient to support stock prices in large-cap IT. Growth visibility has become the primary currency.

Post-results commentary revealed a clear divergence among brokerages. Nomura maintained a Buy rating with a target price of ₹290, arguing that Q3 operational performance was ahead of expectations and that valuation comfort provides downside support. Nomura acknowledged the disappointment on Q4 guidance and trimmed its longer-term earnings estimates but remained constructive on cash flows and dividend yield.

On the other hand, Jefferies retained an Underperform rating with a target of ₹220. The brokerage flagged weak deal bookings, slower ramp-up of new contracts, and potential margin pressure from execution and acquisition-related costs. Jefferies also pointed to limited earnings growth visibility and a less compelling risk-reward profile.

The split reflects broader uncertainty on whether Wipro’s current slowdown is cyclical or partly structural.

For Indian equity markets, Wipro’s sharp fall reinforces the cautious tone around IT stocks, especially those with exposure to discretionary global spending. The reaction may weigh on sentiment across the sector, even as companies with stronger guidance differentiation continue to attract selective buying.

From a business standpoint, Wipro’s results suggest that internal efficiency gains are cushioning profitability but cannot fully offset slower demand. Until deal wins translate into visible revenue acceleration, the stock is likely to remain headline-sensitive.