Wipro Guides for Revenue De-Growth in Q1 FY26 as Clients Turn Cautious Operating margins for the March quarter expanded 110 basis points to 17.5 per cent from 16.4 per cent in the corresponding quarter of the previous year.
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IT services major Wipro has revised its sequential revenue growth guidance for the first quarter ended June to -3.5 per cent to -1.5 per cent in constant currency as clients take a cautious approach on large transformational deals and discretionary spending amid US President Donald Trump's increase in tariffs.
The Bengaluru-based company reported a net profit of INR 3,569.60 crore for the fourth quarter ended March, up nearly 26 per cent from the year-ago period. The gross revenue for the fourth quarter was up 1.3 per cent YoY and merely 0.8 per cent sequentially to INR 22,504.2 crore.
The IT services segment revenue for the fourth quarter in dollar terms grew 2.3 per cent annually in constant currency to USD 2.6 billion on the back of large deals bookings that grew 48.5 per cent YoY.
"We closed FY25 with two mega deal wins, an increase in large deal bookings, and growth in our top accounts. Client satisfaction scores improved, reflecting strong execution and engagement. We also continued to invest in our global talent and in strengthening our consulting and AI capabilities. As clients remain cautious in the face of macroeconomic uncertainty, we're focused on partnering closely with them while staying committed to consistent and profitable growth," said Srini Pallia, CEO and Managing Director, Wipro.
"We are continuing to see strong momentum in large deals. In Q4, we closed 17 large deals with a total value of USD 1.8 billion across markets and sectors. For the full year, we closed 63 large deals for a total value of USD 5.4 billion, which is a year-on-year growth of 17.5 per cent," Pallia told reporters at a post-earnings briefing.
The Indian IT services industry may brace for a challenging year ahead as the new tariffs under American President Donald Trump are likely to increase inflation in its key US market and force clients to cut spending. The recent tariff rates add to the existing delays in the decision-making cycle of clients and a cut in discretionary spend.
Operating margins for the March quarter expanded 110 basis points to 17.5 per cent from 16.4 per cent in the corresponding quarter of the previous year. On a sequential basis, margins remained flat.
Aparna Iyer, Chief Financial Officer, said "Our focus on execution rigour has ensured that our margins have steadily expanded even in a softening revenue environment. Our endeavor will be to maintain the margin in a narrow band in the coming quarters."
Banking, Financial services & Insurance (BFSI), the largest vertical for Wipro declined 0.8 per cent YoY in constant currency and contributed 34.2 per cent to the total revenue as of the March quarter. Consumer Business, the second largest vertical remained flat YoY and contributed 18.9 per cent to the revenue.
Analysts believe Wipro's modest quarterly growth of 0.8 per cent in Q4 is largely due to subdued discretionary spending and global economic headwinds.
"Despite this, the outlook remains positive, driven by a strong deal pipeline and early signs of recovery in key sectors like BFSI and healthcare, which could help offset weakness in slower-performing industries. The company is focusing on securing large deals, strengthening client relationships, expanding AI and GenAI capabilities, and adjusting its operations to meet evolving market needs. Although attrition has slightly improved from the previous quarter, maintaining workforce stability remains critical. Rising workload pressures could affect service quality and delivery, posing risks to future growth if not addressed effectively," said Biswajit Maity, Senior Principal Analyst at Gartner.
The voluntary attrition rate on a trailing 12-month basis declined to 15 per cent from 15.3 per cent in the preceding three months taking the total headcount to 233,346 as of March 31, 2025.
Wipro declared its results on Wednesday after market hours. Ahead of the results, Wipro shares closed up 1.4 per cent at INR 247.50 on the BSE.
