Wipro Limited

Wipro Limited reported Q1 FY27 IT services revenue of $2.61 billion, reflecting a 0.9% year-on-year growth but a 1.2% sequential decline in constant currency, falling within the guided range. The IT services margin stood at 16%, a 1.2% decline year-on-year, primarily attributed to the incremental impact of salary increases, ramp-up of large deals, and ongoing investments in AI. Net income for the quarter was INR 33.6 billion, with EPS at INR 3.2, showing a 0.6% year-on-year growth. Operating cash flows were strong at 98% of net income, and gross cash including investments totaled $4.3 billion.

The company observed a resilient but uncertain macro environment, with technology investments remaining focused on AI, data, cloud, modernization, cybersecurity, and productivity-led transformation. Wipro is actively executing a consulting-led, AI-powered strategy to help clients reimagine and redesign their enterprises around intelligence. This involves leveraging AI-led capabilities through its WINGS platform, building AI-native business models, and forging strong partnerships across the AI ecosystem, including the recent launch of an Applied AI Center of Excellence for Claude models.

Wipro's order booking for the quarter totaled $3.4 billion, with large deal bookings contributing $1.6 billion from 13 significant deals. While some deal decisions slipped into Q2, management indicated a healthy pipeline across various regions, particularly in Europe (UK and Nordics). The company highlighted two key deal wins: modernizing digital operations for a global animal healthcare provider using Wipro Intelligence, and transforming the application landscape for a leading European specialty chemicals company.

Geographically, APMEA revenue grew robustly by 13.5% YoY and 4.4% sequentially in constant currency, while Europe SMU saw 6% YoY growth driven by BFSI, technology, and communication. However, Americas remained soft, with Americas 1 flat YoY and Americas 2 declining 7.3% YoY. Sector-wise, BFSI grew 2.6% YoY but declined 1.2% sequentially, attributed to slower large deal ramp-ups and discretionary spend. The Healthcare segment experienced a 3.0% YoY and 2.6% sequential decline, impacted by pressures in the US healthcare ecosystem and budget reallocations towards AI and compliance.

The Board of Directors declared an interim dividend of INR 2 per share for the quarter. Cumulatively, Wipro has returned over $3 billion to shareholders in the last year. The company also completed the acquisition of Mindsprint during the quarter, which is now integrated, with its headcount included in Q1 and revenues fully contributing to Q2 guidance. Gross cash including investments stood at $4.3 billion, indicating strong liquidity.

For Q2 FY27, Wipro provided guidance for sequential revenue growth between -1.5% and +0.5% in constant currency, translating to an IT services business segment revenue range of $2.574 billion to $2.627 billion. The company aims to return to its previously stated margin band of 17% to 17.5%, acknowledging that current investments in AI and acquisitions have impacted Q1 margins. Management clarified that the margin impact of AI-driven deals would vary, with cost-takeout deals baking in productivity and new 'Reimagine AI' services driving premium rates.