WIPRO REPORTED IT SERVICES REVENUE OF US$2.59 BN

News: Wipro reported IT services revenue of US$2.59 bn, down 0.8% QoQ/ 1.2% YoY in CC terms. Geography wise in CC terms on a QoQ basis APAC (10.5% of the mix) and Americas 1 (33% of the mix) grew by 1% and 0.2%. Whereas Europe (26% of the mix) and Americas 2 (30.6% of the mix) declined by 2.5% and 1% respectively. Segment wise on a QoQ basis in CC terms, growth was led by ER&U (17.3% of the mix) which grew by 1.1% whereas, Health (14.4% of the mix), Consumer (19% of the mix) and BFSI (34.2% of the mix) declined by 3.1%, 1.3% and 0.5% respectively. The IT services EBIT margins came at 17.5%, (flat QoQ). The company won a TCV of US$ 4 bn, (up 10.5% YoY in CC terms). The large deal TCV stood at US$ 1.8 bn (up 48.5% YoY in CC terms) constituting of 17 large deals in the quarter. For FY25, the company reported IT services revenue of US$10,511.6 mn (down 2.3% YoY in CC terms). The EBIT margin for the year stood at 17.1%, (up ~100 bps YoY). While PAT stood at ₹13,135.4 crore (up 19% YoY). The management has guided for IT Services business segment revenue to be in the range of US$2,505 million to US$2,557 million, translating to sequential guidance of (-)3.5% to (-)1.5% in CC terms. 

View: Wipro reported an abysmal quarter on the revenues front, amidst global macroeconomic uncertainty and US tariffs which is causing clients to tread with caution w.r.t transformation projects and discretionary spending. Sectors like consumer and manufacturing (Auto and Industrials) saw direct impact from this uncertainty, while BFSI remained resilient. The  softness is expected to persist in Q1. The management aims to keep margins in the narrow band of 17–17.5%. The key positive this quarter was the strong TCV and robust order pipeline, bolstered by two mega deal wins. Key monitorable ahead would be Wipro’s ability to improve deal-to-revenue conversion and stabilize its European operations. We remain cautious given the lack of near-term positive catalysts for growth.

Impact: Negative