Wipro reported a 1.4% sequential decline in IT services revenue to $2.6 billion for the quarter ended June, trailing larger peers TCS and HCLTech, as clients prioritise AI investments and tighten discretionary spending, Business Today reported.
Q1 Financial Highlights
Wipro's IT services revenue of $2.6 billion was down 1.4% sequentially but up 1% year-on-year. In constant currency, revenue declined 1.2% sequentially and grew 0.9% year-on-year. IT services operating margin fell to 16%, down 130 basis points sequentially and 120 basis points from a year earlier, reflecting the impact of wage hikes and continued investments, according to Business Today.
Total bookings stood at $3.3 billion, while large deal bookings rose 12.9% sequentially in constant currency to $1.6 billion.
| Metric | Q1 FY26 | Sequential Change | YoY Change |
|---|---|---|---|
| IT Services Revenue | $2.6B | -1.4% | +1.0% |
| Constant Currency Revenue | - | -1.2% | +0.9% |
| Operating Margin | 16.0% | -130 bps | -120 bps |
| Total Bookings | $3.3B | - | - |
| Large Deal Bookings | $1.6B | +12.9% (CC) | - |
Peer Comparison
Wipro's performance lagged behind its larger rivals. TCS reported June-quarter revenue of $7.6 billion, up 2.7% year-on-year and largely flat sequentially. HCLTech posted revenue of $3.6 billion, down 0.9% sequentially but up 3% year-on-year. In constant currency, TCS grew 0.4% sequentially and 3.2% year-on-year, while HCLTech declined 0.5% sequentially but grew 2.6% year-on-year, Business Today reported.
Demand Environment and AI Shift
CEO Srini Pallia struck a cautious note on near-term demand, saying the demand pipeline remains healthy but there is still uncertainty. "While the demand pipeline remains healthy, there is still uncertainty, and that has been factored into our guidance," Pallia said, according to Business Today.
Pallia noted that spending patterns have become more disciplined. "Technology investments have not slowed — they have become more focused," he said during the earnings call. "Clients continue to invest in AI, data, cloud modernisation, cybersecurity and productivity-led transformation, but decision cycles have become longer and spending is being measured with greater rigour."
He said enterprises are increasingly reallocating budgets from conventional IT projects to AI initiatives, resulting in softer discretionary spending. "The pipeline is primarily driven by cost optimisation and vendor consolidation. Clients are taking costs out of traditional IT spending to fund AI investments," he added.
Pallia also highlighted that conversations around AI have become more sophisticated, with clients seeking measurable business outcomes. While concerns about rising LLM token consumption persist, the industry is likely to stabilise as AI adoption matures, he said.
Regionally, Wipro continues to see strong momentum in BFSI, particularly in the Americas, although healthcare remains under pressure due to ongoing transitions in the US market, according to Business Today.
Guidance and Margin Outlook
Wipro guided September-quarter IT services revenue in the range of $2.5 billion to $2.6 billion, implying sequential constant currency growth of -1.5% to 0.5%.
Chief financial officer Aparna Iyer said the recent wage hike had created temporary headwinds but expressed confidence that margins would recover over the next few quarters, Business Today reported.
On hiring, chief human resources officer Saurabh Govil said Wipro did not hire freshers during the quarter. Last year, the company onboarded about 7,500 graduates, taking the headcount tally to about 2.4 lakh employees. "We will reassess hiring depending on the demand environment, but we are not providing any hiring guidance at this point," Govil said.
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