Wipro, India’s fourth-largest IT services firm, recently released its financial results for the January-March quarter, surpassing profit expectations but falling short of revenue predictions. This discrepancy underscores the ongoing challenges faced by the global IT services market, as demand continues to show signs of weakness.

Performance Overview: Profit vs. Revenue

While Wipro’s profits showed a sequential improvement, the company’s revenue performance did not match analyst forecasts. This trend, combined with a cautious outlook for the first quarter of FY26, indicates persistent macroeconomic hurdles and a degree of wariness among clients.

For the upcoming April–June period, Wipro projects a revenue decline of 1.5% to 3.5% in constant currency, a more pessimistic outlook compared to the previously set guidance of (-1%) to 1% for the March quarter.

Executive Insights on Current Challenges

During the post-earnings press briefing, Wipro’s CEO, Srini Pallia, expressed concerns about the volatile global market. He stated, “The industry environment has been uncertain throughout the year, and recent tariff announcements have added to this instability.” Pallia emphasized that clients’ apprehensions vary across different regions and sectors, with manufacturing and consumer markets feeling particularly pressured.

Chief Financial Officer Aparna Iyer supported this viewpoint, acknowledging the multiple challenges impacting revenue. “We’re navigating a tough macroeconomic landscape that’s exerting downward pressure on our earnings. Nonetheless, we aim to keep our margins stable in the forthcoming quarters,” she remarked.

Strong Deal Activity Amidst Revenue Concerns

Though revenue forecasts are less than optimistic, Wipro reported robust performance in deal acquisitions. The company secured large deals worth $1.8 billion in the January-March quarter, a significant increase from the nearly $1 billion recorded in the previous quarter. In total, Wipro achieved deal bookings of $4 billion for the March quarter, up from $3.5 billion earlier. Throughout FY25, the company finalized 63 large deals valued at $5.4 billion, with large deals defined as those exceeding $30 million.

Pallia noted, “We’re witnessing strong momentum in securing large deals. In the fourth quarter alone, we closed 17 deals across various markets and sectors.”

Market Response and Sector Performance

Despite the positive deal activity, Wipro’s stock faced a downturn in overseas markets. Shares of Wipro’s American Depository Receipts plummeted over 6% on the New York Stock Exchange, while shares on the National Stock Exchange rose by 1.5%, closing at Rs 247.60.

In terms of sector performance, Wipro’s BFSI (Banking, Financial Services, and Insurance) segment, which is its largest revenue source, saw a modest 10 basis point increase in revenue share. Conversely, the consumer sector experienced a 10 basis point decline. The manufacturing, energy, and resources sectors improved by 40 basis points, while technology and communication fell by 10 basis points, with healthcare dropping 30 basis points.

Sector-Specific Impacts and AI Innovations

Pallia pointed out that the effects of macroeconomic factors are not uniform across all industries. “While sectors like consumer goods and manufacturing are directly impacted, BFSI has shown resilience, particularly in regions like APMEA and the US, where Capco plays a significant role,” he explained.

Wipro is also making strides in the generative AI arena. “Clients are continuing to invest in GenAI technology, moving from proof of concepts to actual deployments in the near future,” Pallia added. The company is leveraging AI to enhance internal efficiencies and improve customer experiences.

Geographic Performance and Future Outlook

From a geographical perspective, Wipro saw a 50 basis point sequential increase in its Americas 1 business, while Americas 2 remained stable. Revenue from Europe dipped by 60 basis points, whereas APMEA saw a growth of 10 basis points.

“Our pipeline across markets, especially in the Americas and Europe, remains strong,” Pallia remarked. He mentioned that the key factor to monitor is discretionary spending, hoping that future tariff resolutions will provide clients with the necessary clarity to proceed with their plans.

In summary, while Wipro’s financial results show areas of strength, the company is carefully navigating an uncertain economic landscape, with a focus on maintaining margins and capitalizing on new opportunities in the AI sector.