CEO rallies evaporate in a flash as investors punish Wipro and LTIMindtree amid IT slump
In less than two trading sessions, shares of Wipro and LTIMindtree have given up 100% and 25% of their respective gains since their CEOs took over. What's causing this?
In less than two trading sessions, investors of Wipro Ltd have wiped out all of the stock’s gains since its new chief executive Srinivas Pallia took over in April 2024. Over the same period, shares of LTIMindtree have lost more than a fourth of their gains since CEO Venu Lambu took over at the end of May 2025.
The specific causes of the declines vary between the two companies, but they are all encompassed by two broad headwinds facing India’s IT sector – AI-led automation resulting in pricing pressure, and uncertainty around tariffs.
From 7 April 2024, when Pallia took over as Wipro’s chief executive, to 16 January 2026, before the company announced its December-quarter results, the stock rose 10.16%. The company then reported $2.64 billion in revenue, up 1.2% sequentially, beating analyst expectations. However, investors were not pleased.
The stock plunged 8% when markets reopened on Monday, and was down another 2.4% at the close of market hours on Tuesday, erasing all of the gains made since Pallia took over.
The decline could be attributed to three factors: a tepid growth outlook, weak organic growth, and delayed ramp-ups.
Management guided for fourth-quarter revenue of $2.64-2.69 billion, which implies a decline at the lower end of the range.
At least one brokerage expects a decline in organic revenue, and muted growth at best. “Wipro guides for 0-2% QoQ CC revenue growth for Q4FY26, lower than current quarter sequential growth at mid-point. Q4 growth could be aided by a two-month incremental contribution of around 1.6% from the Harman DTS acquisition, implying weak organic growth of -1.6% to 0.5% QoQ CC. Guidance bakes in the delayed ramp-up of large deals won in previous quarters and fewer working days," ICICI Securities analysts Ruchi Mukhija, Aditi Patil and Seema Nayak said in a note dated 17 January.
Management also expects delays in large deal ramp-ups by certain clients. “Some of the other deals, given the nature of the deals that we have won, we have earlier also highlighted that these deals will take a few quarters to ramp up. So, it's a question of it coming in through the course of the next few quarters. And therefore, we have called it out saying that in Q4, we may not be able to realize the full impact and therefore, we are calling it out," Aparna Iyer, Wipro’s chief financial officer, said during the company’s post-earnings call with analysts on 16 January.
LTIMindtree punished, too
Meanwhile, Mumbai-based LTIMindtree has also found itself on the receiving end of investors’ ire, albeit to a lesser extent. From 31 May 2025, when Lambu took over as chief executive, to 19 January 2026, before it announced its December-quarter results, the company’s shares were up 26.36%.
The company then announced $1.21 billion in Q3 revenue, up 2.4% from the preceding quarter – its best third-quarter performance in three years. Still, investors were displeased, causing its shares to fall 7% on Tuesday, wiping off more than 25% of its gains since Lambu became its chief executive.
Much of this decline could be attributed to AI-induced turbulence in its top accounts. “AI-led productivity initiatives at large clients continue to affect near-term growth, particularly within the top five accounts. However, the intensity of this impact appears to be moderating, with four of the top five clients having largely completed their productivity programs and the remaining account expected to stabilize around 4Q," Motilal Oswal Financial Services analysts Abhishek Pathak, Keval Bhagat and Tushar Dhonde, said in a note dated 19 January.
IT sector in the doldrums
The two companies may be hurting the most but they aren’t suffering alone. Uncertain outlooks from the country’s largest IT outsourcers caused the Nifty IT index to drop 0.5% to 25,469.45 points as of 11:45 am on Tuesday. Mint reported on 20 January that four of the country’s largest IT services companies were heading into the last quarter with weaker full-year trajectories than last year, underscoring how weak demand visibility remains for these companies.
Tata Consultancy Services Ltd is at risk of clocking its first annual revenue decline since its listing in 2004. Infosys Ltd and HCL Technologies Ltd are staring at slower growth than last year, while Wipro is bracing for a third consecutive year of contraction. Tech Mahindra Ltd is the only company expected to buck the trend.
This gloomy outlook points to a third straight year of sluggish growth for India’s IT majors as automation, AI-led pricing pressure and tariff uncertainty cloud demand visibility.
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