Wipro reported a weaker-than-expected performance for the April-June quarter on Thursday as margin pressure dragged down profit despite stable revenue, while the IT services major guided for another soft quarter amid continued client caution. The company expects revenue from its IT services business to be in the range of (-)1.5% to 0.5% in constant currency terms for the September quarter, an improvement from the previous quarter’s guidance of (-)2% to flat growth but signalling that demand remains uneven.
Consolidated net profit fell 4.3% sequentially to Rs 3,352 crore from Rs 3,502 crore, missing Bloomberg estimates of Rs 3,459 crore. Revenue from operations rose 1% quarter-on-quarter to Rs 24,479 crore, broadly in line with Bloomberg estimates of Rs 24,737 crore. Ebitda declined to Rs 3,829 crore, below Bloomberg estimates of Rs 4,804 crore, while operating margin narrowed to 16%, contracting 130 basis points sequentially and 120 basis points from a year ago. The board declared an interim dividend of Rs 2 per equity share.
Total bookings stood at $3.4 billion during the quarter, down 2.4% sequentially. Large deal bookings came in at $1.6 billion, accounting for nearly half the total bookings, with the company signing 13 large deals. Chief Executive Srini Pallia said enterprises continued to invest in technology, although spending decisions had become more focused amid macroeconomic uncertainty.
“Clients are moving beyond technology modernisation to AI-enabled operating models that improve quality, resilience, and productivity. Wipro’s consulting-led, AI-powered approach helps clients embed AI at the core of their business, and these engagements reflect both the breadth of our capabilities and the trust clients place in us as a transformation partner,” he said. Pallia, however, did not disclose the contribution of AI to revenue or quantify productivity gains being passed on to customers, saying the metrics varied across projects.
AI Transition
Management attributed the margin contraction primarily to salary hikes implemented in March and continued investments in artificial intelligence. Chief Financial Officer Aparna Iyer said the impact would take a few quarters to recover. “This will take a few quarters for us to recoup, which is the normal business course. It becomes a little more challenging in the background of our weaker revenue environment, but we have both the traditional levers and AI coming in,” she said.
Uneven Regional Demand
Business performance remained mixed across verticals. In constant currency terms, BFSI revenue declined 1.2% sequentially after falling in the previous quarter, while the Energy, Manufacturing and Resources business dropped 3.6% and Healthcare fell 2.6%. The Consumer segment posted marginal growth of 0.7%, while Technology and Communications edged up 0.2%. Geographically, both Americas 1 and Americas 2 remained under pressure with declines of 2.3% and 2.5%, respectively, while APMEA grew 4.4%.
Europe declined 0.9% sequentially but Pallia said the region continued to see healthy demand, particularly in BFSI, technology and communications, supported by a robust deal pipeline across the UK and Nordic markets. He attributed the weakness in the Americas largely to client-specific issues, while Iyer said the energy vertical remained challenging due to the impact of the West Asia conflict, although the company expects recovery as the deal pipeline improves.
