Wipro is set to announce its Q1FY26 earnings on Thursday, July 17, 2025, and analysts anticipate a muted performance due to continued demand weakness, particularly in Europe, and challenges related to client budgets. However, cost control measures and currency tailwinds are expected to support stable margins.
Revenue and Profit Expectations
Revenue growth is projected to be flat to 2% year-on-year, with estimates ranging from Rs 21,991 crore to Rs 22,358 crore. Some brokerages anticipate a sequential decline in revenue. Motilal Oswal Financial Services expects a 2.5% constant currency (CC) decline in revenue for the IT services business, while Business Standard estimates a 1.7% quarter-on-quarter dip to ₹22,121.30 crore. Profit after tax (PAT) is expected to grow 5-12% year-on-year, estimated between Rs 3,161 crore and Rs 3,351 crore. Various firms have offered different estimates: Elara Capital anticipates an adjusted PAT of Rs 3,351 crore, JM Financial estimates Rs 3,350 crore, Kotak Equities projects Rs 3,309 crore, and HSBC foresees Rs 3,161 crore. However, on a QoQ basis, PAT may fall. Motilal Oswal predicts a 10% QoQ drop, while Kotak anticipates a 7.3% decline.
Key Things to Watch Out For
Several factors will be crucial for investors to monitor:
- Guidance for Q2FY26: Analysts expect Wipro to provide a revenue growth guidance in the range of -1% to +1% QoQ in constant currency terms for the September 2025 quarter.
- Performance in Europe: Europe's performance continues to weigh on overall growth, making it a key area of focus. Ongoing client-specific challenges and project ramp-downs may keep the region under pressure.
- Deal Wins and Pipeline: Investors will be keen to hear about Wipro's participation and competitiveness in vendor consolidation deals, where the company has had a mixed track record. The large deal pipeline and win rates will also be closely watched. Kotak expects large deal Total Contract Value (TCV) to be in the $1.2-1.3 billion range.
- Margin Sustainability: Management's commentary on margin sustainability will be critical, with analysts looking for details on cost control measures and currency tailwinds.
- GCC Growth Strategy: Insights into Wipro's Global Capability Center (GCC) growth strategy will be important.
- Hiring Trends: Hiring trends and employee count will be monitored in light of the expected weakness in topline growth.
- Capco Business: The outlook for the Capco consulting business amid policy uncertainty in the US will be a key area of focus.
- Impact of AI Deflation: Pressure from AI deflation is expected to filter through client demand for price cuts, which is likely to keep revenue conversion light.
Other Key Metrics
- EBIT Margins: Kotak forecasts an EBIT margin of 17.5%, up 106 bps YoY and 14 bps QoQ, while HSBC sees 16.8%, up 31 bps YoY but down 44 bps QoQ.
- Deal Bookings: Wipro received total bookings of $3.3 billion in Q1FY25, with large deal bookings at $1.2 billion.
- Employee Count: The company's total headcount was 2,34,391 at the end of the June quarter in Q1FY25.
In summary, Wipro's Q1 results are expected to reflect a muted performance due to macroeconomic headwinds, particularly in Europe. Investors will be closely watching the company's guidance for Q2, its strategy for navigating the challenging environment, and its ability to secure and execute large deals. The board will also consider declaring an interim dividend for the financial year 2025-26.
