Anticipated Q1FY26 Performance: Wipro expects revenue stagnation and thinner profit margins ahead
Wipro Ltd, one of India's leading IT services companies, is set to announce its Q1 FY26 results, with analysts predicting a muted revenue growth due to weak demand in Europe and challenges related to client budgets and macroeconomic headwinds.
According to brokerage estimates, Wipro's revenue for Q1 FY26 may range between ₹21,943 crore and ₹22,184 crore, representing a year-on-year growth of just 0.1% to 1%. Dollar revenues are expected to decline about 1% quarter-on-quarter and 2.1% year-on-year.
Profit after tax (PAT) is anticipated to rise moderately by 5-12% year-on-year, estimated between ₹3,161 crore and ₹3,351 crore, supported by cost control measures and favourable currency movements. However, sequential profits may decline due to weaker revenues and operating cost pressures.
Margins are likely to stay stable or show slight erosion, with EBIT margins forecasted around 17%, down from 17.5% in the previous quarter due to lower utilization and rupee appreciation.
The company faces ongoing headwinds including delayed decision-making by clients, project realignments, and broader macroeconomic uncertainty, particularly in Europe and the US markets. These factors have contributed to the soft performance in Q1 and a subdued near-term outlook. However, growth visibility is expected to improve in the second half of FY26, helped by the ramp-up of large deals such as the Phoenix contract.
Key points to watch in Wipro’s Q1 FY26 performance include:
- Soft revenue growth and flat to slightly negative sequential top line - Stable to slightly compressed margins due to utilization and currency effects - Moderate PAT growth supported by cost discipline - Uncertainty from macroenvironment and client budget constraints - Critical outlook on deal pipeline and regional markets, especially Europe and US - Expectations of better performance or recovery in H2 FY26
In addition, Wipro plans to onboard 10,000 to 12,000 freshers in FY26. The company's employee count rebounded in FY25 with a 0.7% increase to 2,33,346 employees, following a sharp 26% decline in FY24.
The ongoing macroeconomic challenges are likely to keep the quarter subdued, with a potential turnaround anticipated in the latter half of the fiscal year. The company's large deal TCV remains strong, but ramp-ups are expected to be gradual and back-ended. Europe remains a weak spot for Wipro due to client-specific issues and slower transformational ramp-ups.
Margins pressures are anticipated in Q1 for Wipro due to lower revenues and pricing adjustments related to vendor consolidation. Wipro had earlier guided for a sequential revenue decline of 1.5% to 3.5% in constant currency terms for Q1.
[^1]: Source: Business Standard [^3]: Source: Economic Times
- Despite the Q1 FY26 results of Wipro Ltd showing a potential decline in dollar revenues and weaker sequential profits due to macroeconomic headwinds, the company still anticipates moderate profit after tax (PAT) growth due to cost control measures and favorable currency movements.
- In the banking and finance sector, Wipro is planning to onboard 10,000 to 12,000 freshers in FY26 as part of its business strategy, following a rebound in employee count in FY25.
- With ongoing challenges such as client budget constraints, delayed decision-making, and project realignments in specific regions like Europe and the US markets, Wipro's Q1 FY26 performance is predicted to show soft revenue growth and stable to slightly compressed margins.
- To counter market volatility and optimize its premium services, Wipro is likely to focus on large deals such as the Phoenix contract for growth visibility in the second half of FY26, with a potential turnaround anticipated in the latter half of the fiscal year.
