IT major Wipro is expected to report a 5-10 per cent year-on-year (YoY) rise in net profit for the June quarter on muted revenues. Margin is seen coming in flattish sequentially, while order wins are pegged at around $1 billion.
Wipro is also scheduled to consider interim dividend for FY25 today. Stock analysts tracking the IT firm said the guidance for the September quarter could be soft. All eyes would be on commentary on demand, growth and margin levers, they said.
Analysts said discretionary demand has not yet picked up and clients are still waiting for uncertainty around tariffs to subside. Deal pipeline is healthy in BFSI, Healthcare and Technology verticals.
Deal wins likely at $1 billion
Antique Stock Broking said Wipro’s IT services segment may report a revenue growth decline of 2.6 per cent QoQ in CC terms and a 1 per cent decline in dollar terms towards the midpoint of its revenue guidance of –
3.5 per cent to minus 1.5 per cent.
“Revenue during the quarter is expected to be impacted by weak demand environment even as there is hope for stability in 2Q and further recovery starting 2HFY26. We expect the EBIT margin to remain flat QoQ at 17.5 per cent despite decline in growth, led by currency tailwinds and cost management. Deal activity remains stable, with large deal bookings exceeding $1 billion,” it said.
PAT is seen rising 10.4 per cent YoY to Rs 3,301 crore from Rs 2,991 crore YoY. “We expect Wipro to provide revenue growth guidance of minus 1 per cent to 1 per cent in
CC terms for 2QFY26,” Antique said.
Demand in Capco consulting
ICICI Securities said it would await for the management commentary on demand in Capco consulting, any improvement in client decision making post 90-day pause between US and China tariffs, impact due to Marelli bankruptcy, competition in vendor consolidation deals and Q2FY25 guidance. Also eyes would be on the pace of conversion of pipeline to TCV and TCV
to revenues.
Soft Q2 guidance
Foreign brokerage HSBC expects Wipro to issue another soft revenue guidance for Q2, although it anticipates an improvement in business outlook from Q3 onwards. For the June quarter, Wipro is projected to report a 5.3 per cent year-on-year rise in net profit at Rs 3,161 crore, on a marginal 0.2 per cent increase in revenue to Rs 22,000 crore. IT services dollar revenue is expected to decline 1 per cent quarter-on-quarter and 2.1 per cent year-on-year. HSBC sees a 150 basis point tailwind for constant currency (CC) revenues.
However, EBIT margin is forecast to dip to 17 per cent from 17.5 per cent in the March quarter, owing to lower utilisation and rupee appreciation.
“We expect Wipro’s CC revenue growth to be at the mid-point of its guided range (-3.5 per cent to -1.5 per cent). The 150 basis point CC tailwind should cushion USD revenue. EBIT margin may contract 45 basis points quarter-on-quarter, weighed down by lower utilisation and INR appreciation. Key watch areas include Wipro’s outlook in Europe, the Capco business amid US policy uncertainty, and the large-deal pipeline,” HSBC noted.
Sharekhan said Wipro is expected to report a sequential revenue growth of minus 2.5 per cent QoQ in CC terms, within its Q1 guided range, of minus 1.5 per cent to minus 3.5 per cent. EBIT margin is expected to be flat sequentially, it said.