Wipro’s Q1 Revenue Declines 1.4% to $2.6 Billion, Lagging Behind Competitors
Bengaluru: Wipro has reported a cautious outlook for near-term demand following a modest performance in the June quarter. The company noted that clients are prioritizing investments in artificial intelligence while being selective with discretionary spending. For the quarter ended June, Wipro’s IT services revenue was $2.6 billion, reflecting a 1.4% sequential decline but a 1% increase year-on-year.
Wipro’s IT services operating margin fell to 16%, down 130 basis points sequentially and 120 basis points year-on-year. The decline was attributed to wage hikes and ongoing investments. Total bookings for the quarter reached $3.3 billion, with large deal bookings increasing by 12.9% sequentially in constant currency to $1.6 billion. In comparison, TCS reported June-quarter revenue of $7.6 billion, while HCLTech posted revenue of $3.6 billion.
Wipro has guided its September-quarter IT services revenue to be between $2.5 billion and $2.6 billion, indicating a potential sequential constant currency growth of -1.5% to 0.5%. CEO Srini Pallia acknowledged that while the demand pipeline remains healthy, uncertainty persists, influencing the company’s guidance. He stated that spending patterns have become more disciplined, with clients focusing on AI, data, cloud modernization, cybersecurity, and productivity-led transformation.
Pallia mentioned that enterprises are reallocating budgets from traditional IT projects to AI initiatives, leading to softer discretionary spending. He noted that the demand pipeline is primarily driven by cost optimization and vendor consolidation. Conversations around AI have become more sophisticated, with clients seeking measurable business outcomes. Regionally, Wipro is experiencing strong momentum in the banking, financial services, and insurance (BFSI) sector, particularly in the Americas, although healthcare remains under pressure.
Addressing margin concerns, Chief Financial Officer Aparna Iyer stated that recent wage hikes have created temporary headwinds but expressed confidence in a margin recovery over the next few quarters. On the hiring front, Chief Human Resources Officer Saurabh Govil confirmed that Wipro did not hire freshers during the quarter, although the company onboarded about 7,500 graduates last year, bringing the total headcount to approximately 240,000 employees. Govil added that hiring will be reassessed based on the demand environment, but no specific hiring guidance is being provided at this time.
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