Wipro, one of India’s leading IT services companies, has recently hinted at a potential decline in its revenue for the upcoming first quarter. This forecast aligns with the concerns raised by larger competitor TCS, as both companies navigate a landscape marked by fluctuating tariffs and changing client priorities within India’s $283 billion IT industry. As a reflection of these uncertainties, Wipro’s American Depositary Receipts (ADRs) saw a drop of 3.19%, trading at $2.73 on the American stock market.
Wipro’s Revenue Forecast for Q1
In its latest announcement, Wipro projected that its revenue for the April–June quarter could decrease between 1.5% and 3.5%. This prediction has contributed to a 5% decline in its U.S.-listed shares, which fell to $2.71 during premarket trading. The company’s ADRs serve as a means for foreign firms to participate in U.S. markets, functioning similarly to regular shares but issued by a U.S. bank.
Q4 Performance Overview
In its recent Q4 results, released on April 16, Wipro reported an impressive 26% year-on-year growth in net profit, which reached ₹3,570 crore. However, revenue in the same period only saw a marginal increase of just over 1%. Notably, the revenue from IT services showed a 1.2% decline quarter-on-quarter and a 2.3% drop year-on-year. The operational margin for the IT services segment remained stable at 17.5%, marking a steady position compared to the previous quarter.
- Year-on-Year Profits: ₹3,570 crore (up 26%)
- Quarterly Revenue Change: -1.2% (QoQ), -2.3% (YoY)
- Operational Margin: 17.5%
Insights into Large Deal Bookings
Wipro’s performance in securing large deals has been noteworthy, with bookings reaching $1,763 million, reflecting a 48.5% increase year-over-year in constant currency terms. This growth is vital as the company aims to enhance its market position amidst rising competition.
Guidance for the Upcoming Quarter
As Wipro prepares for the first quarter of FY26, it anticipates a drop in its IT services revenue, projecting figures between $2,505 million and $2,557 million. This forecast suggests a sequential decrease in revenue, consistent with the current economic climate, where clients are exercising caution due to macroeconomic challenges.
Pallia, Wipro’s CEO, emphasized the company’s commitment to collaborating closely with clients during these uncertain times. He noted, "While we face challenges, our focus remains on fostering partnerships that promote sustainable and profitable growth." He also highlighted that the company achieved significant deals and improved client satisfaction scores, underscoring strong execution and engagement.
Workforce Growth and Future Investments
Wipro’s workforce has seen slight growth, ending the fiscal year with 233,346 employees, compared to 232,614 the previous year. The company continues to invest in talent development and enhancing its consulting and AI capabilities, vital for maintaining competitive strength against larger rivals like TCS and Infosys.
- Employee Count: 233,346 (up from 232,614)
- Total Bookings for Q4: $3,955 million (up 13.4% QoQ)
As Wipro navigates the complexities of the IT sector, its proactive measures and focus on client relationships may help it weather the ongoing challenges, paving the way for future success.
