Wipro Limited — Q3 FY26 earnings call

Call held 16 Jan 2026

Management summary

Wipro reported a quarter of sequential growth in IT Services revenue, driven by broad-based performance across markets and sectors, and the HARMAN DTS acquisition. Operating margins saw significant expansion, reaching a 7-quarter high. The company continues to focus on AI-led transformation and strategic investments, while also returning capital to shareholders through increased dividends. Q4 guidance reflects some headwinds from fewer working days and delayed ramp-ups of large deals, leading to a cautious outlook for the immediate next quarter.

Highlights

  • IT Services sequential revenue grew 1.4% in constant currency to $2.64 billion.

  • Operating margins expanded 40 basis points sequentially to 17.6%, marking one of the best performances in 7 quarters.

  • Total contract value (TCV) for the quarter was $3.3 billion, with large deal bookings at $871 million.

  • Adjusted net income stood at INR 33.6 billion, with adjusted EPS at INR 3.21, up 3.5% QoQ.

  • Declared an interim dividend of INR 6 per share, bringing total cash distributed in FY26 to over $1.3 billion.

  • Q4 FY26 IT Services revenue growth guidance is 0% to 2.0% sequentially in constant currency.

  • HARMAN DTS acquisition contributed 0.8% to constant currency revenue growth in Q3 FY26.

  • Operating cash flow was 135% of net income, with gross cash including investments at $6.5 billion.

Key financials

  1. IT Services Revenue $2.64 Bn -1.2%YoY
  2. Operating Margin 17.6% +0.1%YoY
  3. Adjusted Net Income ₹33.6 Bn
  4. Adjusted EPS ₹3.21 0%YoY
  5. Total Contract Value $3.3 Bn
  6. Large Deal Bookings $871 Mn
  7. Operating Cash Flow Ratio 135%
  8. Gross Cash $6.5 Bn
  9. Effective Tax Rate 23.9%

What they filed

Q1 FY27: revenue up 10.6%, net profit up 0.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue22,302 22,319 22,504 22,135 22,697 +2%23,556 +6%24,236 +8%24,479 +11%
EBITDA4,503 4,540 4,624 4,233 4,372 −3%4,296 −5%4,909 +6%4,633 +9%
Net profit3,227 3,367 3,588 3,336 3,262 +1%3,145 −7%3,522 −2%3,356 +1%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of YoY Growth
APMEA 0.066 cc 18.5%
EMR 0.058 cc 16.3%
Consumer 0.057 cc 16.0%
Americas 2 0.052 cc 14.6%
Europe 0.046 cc 12.9%
Tech and Comm 0.035 cc 9.8%
Americas 1 0.028 cc 7.9%
Health 0.01 cc 2.8%
BFSI 0.004 cc 1.1%

Guidance & targets

Revenue

  • IT Services Revenue Growth Revenue · Q4 FY26 · Medium confidence 0% to 2.0%
    In Quarter 4, we are projecting sequential IT Services revenue growth of 0% to 2.0% in constant currency.

    — Srini Pallia, Chief Executive Officer & Managing Director

Margin

  • Operating Margin Band Margin · next few quarters · Medium confidence 17% to 17.5%
    Our endeavor is going to be to make sure that we keep it in that band of 17% to 17.5%.

    — Aparna Iyer, Chief Financial Officer

Dividend

  • Cash Distributed to Shareholders Dividend · FY26 · High confidence in excess of $1.3 billion
    And we will be able to significantly exceed the minimum threshold that we had laid out in our capital allocation policy for the block-ending financial year 2026.

    — Aparna Iyer, Chief Financial Officer

Headcount

  • Salary Hike Cycle Headcount · Q4 FY26 · Low confidence this quarter
    In salary hikes, we will take a call in the next few weeks in terms of when should we be doing it. Our intention is to look at it this quarter, but we will confirm it during the next couple of weeks.

    — Saurabh Govil, Chief Human Resources Officer

Risks & concerns

  • Macroeconomic uncertainty and discretionary spend cuts

    medium

    The demand environment shows no significant change, with discretionary spend uncertainty continuing, impacting client budgeting.

    Management acknowledged

  • Delayed ramp-ups of large deals

    medium

    Certain large deals are taking longer to ramp up due to client situations and the nature of the deals, impacting Q4 revenue realization.

    Management acknowledged

  • Challenges in EMR and Consumer verticals

    medium

    EMR performance is impacted by macroeconomic uncertainty, tariffs, and supply chain issues, while the Consumer vertical faces tariff uncertainty and delayed SAP programs.

    Management acknowledged

  • Fewer working days in Q4

    low

    Q4 is impacted by fewer working days, which partially offsets the typical recovery from furloughs.

    Management acknowledged

  • Incremental dilution from HARMAN DTS acquisition

    low

    The HARMAN DTS acquisition will lead to incremental dilution to margins in Q4, which the company will need to absorb.

    Management acknowledged

Q&A highlights

2 direct
Outlook and turnaround for the EMR vertical Partial
As far as EMR is concerned, our performance in this sector clearly has been impacted based on the macroeconomic uncertainty we have seen, some during tariff related and also some disrupted supply chain issues that we faced. However, our pipeline continues to remain strong in the sector.

Analyst questioned the significant revenue loss in EMR, and management acknowledged the challenges but provided a qualitative outlook on pipeline strength rather than a clear turnaround timeline.

Asked by Nitin Padmanabhan

Impact of delayed large deal ramp-ups on Q4 guidance and future growth Direct
Some of the other deals, given the nature of the deals that we have won, we have earlier also highlighted that these deals will take a few quarters to ramp up. So, it's a question of it coming in through the course of the next few quarters. And therefore, we have called it out saying that in Q4, we may not be able to realize the full impact and therefore, we are calling it out.

This question directly addressed the headwinds impacting the Q4 guidance, and management provided a clear explanation about the nature and timing of large deal ramp-ups.

Asked by Nitin Padmanabhan

Capital allocation strategy, specifically regarding buybacks given significant cash reserves Direct
We have said that buyback will continue to be a means by which we will return cash to our shareholders. It's certainly an option on the table and we will consider it at an appropriate time.

Analyst probed the use of the company's substantial cash balance, and management confirmed buyback remains an option, clarifying the considerations and statutory readiness.

Asked by Kawaljeet Saluja

2 min read 6 chapters

Detailed narrative

Q3 FY26 Performance Highlights and Margin Expansion

Wipro reported IT Services sequential revenue of $2.64 billion, growing 1.4% in constant currency, with 0.8% contribution from the HARMAN DTS acquisition. Operating margins expanded by 40 basis points sequentially and 10 basis points year-on-year to reach 17.6%, marking one of the best performances in the last seven quarters. Adjusted net income for the quarter was INR 33.6 billion, translating to an adjusted EPS of INR 3.21, which increased 3.5% quarter-on-quarter.

Strategic Focus on AI-led Transformation and Wipro Intelligence

The company is actively positioning itself for an AI-first world through 'Wipro Intelligence,' anchored on three pillars: industry platforms/solutions (e.g., Payer AI, NetOxygen), delivery platforms (WINGS, WeGA), and the Wipro Innovation Network. This approach is driving large deal wins, such as multi-year transformations for a global education provider in the UK and a US-based fitness technology company, both leveraging WINGS and WeGA for efficiency and growth.

HARMAN DTS Acquisition and Synergies

The acquisition of HARMAN DTS was completed in Q3 FY26, adding engineering and AI capabilities that complement Wipro's existing offerings. This acquisition strengthens the engineering global business line, accelerates AI-driven product innovation, and opens new regions and high-growth industries. HARMAN DTS contributed 0.8% to the constant currency revenue growth in Q3 and is expected to bring incremental dilution to Q4 margins.

Capital Allocation and Shareholder Returns

Wipro's gross cash including investments stands at $6.5 billion. The Board of Directors declared an interim dividend of INR 6 per share, bringing the total cash distributed to shareholders in the current fiscal year to over $1.3 billion, exceeding the minimum threshold set for FY26. Management confirmed that buyback remains an option for returning excess cash, with statutory considerations being conducive for such a move.

Segmental Performance and Q4 Guidance

In constant currency, Americas 1 grew 1.8% sequentially, Europe grew 3.3%, and APMEA grew 1.7%. However, Americas 2 declined 0.8%, and EMR declined 4.9% sequentially. For Q4 FY26, Wipro projects sequential IT Services revenue growth of 0% to 2.0% in constant currency. This guidance factors in incremental HARMAN DTS revenue but is impacted by fewer working days and delayed ramp-ups of certain large deals won earlier in the year.

Challenges in EMR and Consumer Verticals

The EMR vertical experienced a significant decline of 4.9% sequentially and 5.8% year-on-year in constant currency, attributed to macroeconomic uncertainty, tariff-related issues, and disrupted supply chains. The Consumer vertical also declined 5.7% year-on-year, impacted by tariff uncertainty and a large SAP program that remains on hold. Despite these challenges, management noted a strong pipeline in energy and manufacturing within EMR, focusing on deal conversion.

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