WIPRO - Wipro Ltd. Share Price

In their Q4 FY '26 Earnings Conference Call, Wipro's management provided a cautious outlook for the upcoming quarter. For Q1, they guided for a sequential revenue growth of -2% to 0% in constant currency terms. Their IT Services revenue for Q4 was reported at $2.65 billion, with a sequential growth of 0.2% and a year-over-year decline of 0.2%. The operating margin was recorded at 17.3%, down 30 basis points sequentially. Notably, order bookings for Q4 stood at $3.5 billion, reflecting a sequential growth of 3.2% but a year-over-year decline of 13.9%.

For the full fiscal year FY '26, IT Services revenue totaled $10.5 billion, with a 1.6% year-over-year decrease. The operating margin for the year was slightly improved at 17.2%, representing a 15 basis point increase from the previous year. Wipro closed 14 large deals in Q4, amounting to $1.4 billion.

Management highlighted significant activity in various sectors, such as BFSI, healthcare, and technology, with marked growth in the APMEA region, especially a major strategic deal with the Olam Group potentially valued over $1 billion. They are also transitioning to a services-as-software approach through the newly established AI-native business unit, indicating a shift towards integrated AI solutions.

Forward-looking points include maintaining operational margins within a narrow band, challenges from delayed client-specific ramp-ups causing revenue volatility, and the expectation of increased investment in AI and related capabilities as the company navigates the competitive landscape.

Question 1: Sandeep Shah from Equirus Securities asked: "There has been a good large deal wins... Why is this delays happening?"

Answer: This is Srini here. The delays are client-specific, particularly impacting our Americas 2 unit in the BFSI sector due to both specific client issues and a delayed ramp-up. While we recognize the softer performance, we have strong opportunities on the horizon, and we anticipate those delays will resolve soon, which should positively impact growth in that sector.

Question 2: Sandeep Shah: "Do you believe second quarter onwards, there could be a delayed ramp-up can actually pull up the growth?"

Answer: For that particular client issue, we expect it to resolve in Q1 without continued material impact. On the geopolitical front, we have not observed significant client behavior change, and our pipeline remains strong, indicating potential for future growth.

Question 3: Ravi Menon from Axis Capital asked: "What led to the sharp decline in top clients?"

Answer: Our top client, historically a strong performer, experienced a one-off quarter of volatility due to specific issues. We maintain robust relationships and expect growth to rebound as we continue to engage effectively with our clients.

Question 4: Dipesh Mehta inquired: "What factor is leading to delay in ramp up?"

Answer: The delay is client-specific and resulted from a strategic shift within the client's operations. However, we have clear visibility and remain confident about ramping up soon, which should improve growth rates in the affected sector.

Question 5: Vibhor Singhal asked: "Will the crude prices and the volatility impact our business?"

Answer: While clients are monitoring geopolitical situations like the Gulf War, we have not seen significant strategic shifts impacting our dealings in energy and utilities. Clients are primarily focused on securing supply chains, which presents opportunities for us.

Question 6: Abhishek Shindadkar requested: "What would have been the contribution for HARMAN in Q4?"

Answer: Our previous disclosures detail HARMAN's contribution. You can estimate its quarterly run rate based on our stock exchange filings for a clearer picture of its impact.

Question 7: Abhishek Shindadkar: "Will we continue to see challenges in larger accounts?"

Answer: Our top clients have shown steady growth YoY, and while we've faced some challenges, we are not unduly concerned. Our ongoing wins reflect our commitment to strengthen these relationships, which are crucial for our growth strategy.