Wipro reports mixed Q1: Guidance improves, margins contract

Wipro reported a mixed performance for the June quarter, with revenue growth exceeding expectations and guidance coming in slightly ahead of Street estimates, even as operating margins slipped to a 15-quarter low and net profit declined sequentially.

The IT giant’s revenue grew 10.6 per cent year-on-year (y-o-y) and 1 per cent sequentially to ₹24,479 crore. Net profit stood at ₹3,352 crore, down 4.7 per cent quarter-on-quarter, but marginally up 0.6 per cent from a year earlier.

Meanwhile, operating margin contracted 130 basis points (bps) sequentially and 120 bps y-o-y to 16 per cent. For the September quarter, the company guided for constant currency (cc) revenue growth in the range of -1.5 per cent to +0.5 per cent.

Total bookings stood at $3.37 billion, down 2.4 per cent sequentially in cc, while large-deal bookings rose 12.9 per cent sequentially to $1.63 billion, indicating continued momentum in big-ticket contracts despite softer overall booking trends.

Meanwhile, Srini Pallia, CEO and Managing Director, said, “The macro environment remains resilient, but uncertainty continues to shape decision-making. Technology investment has not slowed, but has become more focused. Clients continue to invest in AI, Data, Cloud, Cybersecurity, Modernisation and productivity-led transformation. Spending, today, is measured with more rigour and longer decision cycles.”

He added that despite selective client spending, Wipro’s pipeline remains healthy. The company continues to see strong engagement across its markets and industries.

Addressing the impact on margins, Aparna Iyer, Chief Financial Officer, said, “What has happened is the two-month incremental increase of wage hike, which will take a few quarters for us to recoup. It becomes a little more challenging in the background of our weaker revenue environment, but we have both traditional levers and AI coming in.”

She highlighted that Wipro would leverage productivity gains across its fixed-price engagements to optimise project delivery while implementing cost-reduction measures, which it described as a key lever for improving performance.

Geographically, the Americas remained a weak spot, with revenue declining both sequentially and annually. However, the company continued to see strong momentum in the Technology & Communications vertical, alongside healthy deal activity in the Consumer segment. It also expects demand in the BFSI vertical to strengthen in the second quarter.

The APMEA region posted growth on both a sequential and annual basis, driven by continued momentum in the BFSI and Consumer sectors.

In Europe, revenue increased y-o-y, supported by robust demand in BFSI and Technology & Communications. While the Energy, Manufacturing & Resources vertical remained subdued, the company said it has a healthy deal pipeline across key markets, including the UK and the Nordic region.

“The real story for Wipro is that margins are under pressure and the management can’t spin that away. Wage hikes have kicked in. AI investments are ramping up. And clients are demanding more for less. That combination is squeezing profitability across the board, not just at Wipro. TCS and Infosys are dealing with some version of the same problem. This is the tax the sector is paying to stay relevant in an AI-led world,” said Tushar Badjate, Director of Badjate Stock & Shares.

Wipro ended the quarter with a workforce of 2,43,044 employees and did not hire any freshers during the period. “We have a good inventory of freshers,” said Saurabh Govil, President and Chief Human Resources Officer, Wipro.