Wipro Limited ((WIT)) has held its Q4 earnings call. Read on for the main highlights of the call.
Wipro Limited’s recent earnings call painted a mixed picture for the company. While there were notable achievements in large deal closures and margin improvements, these were overshadowed by declining revenues, especially in the European market, and a challenging macroeconomic environment. The overall sentiment of the call leaned towards highlighting the challenges faced by the company more than its successes.
Strong Large Deal Performance
Wipro showcased its strength in closing large deals, with 17 significant deals in Q4 alone, amounting to $1.8 billion. For the entire fiscal year, the company secured 63 large deals totaling $5.4 billion, marking a 17.5% year-on-year growth. This performance underscores Wipro’s strategic focus on driving large deal momentum as a key growth area.
Margin Improvement
The company reported an operating margin of 17.5% for Q4, reflecting a 1.1% year-on-year expansion. For the full fiscal year, margins expanded by 0.9%, demonstrating Wipro’s ability to enhance operational efficiency despite revenue challenges.
Growth in Capco Business
Capco, a key business unit of Wipro, exhibited robust growth with a sequential increase of 6.5% and an impressive 11.5% growth on a year-on-year basis. This growth highlights Capco’s strong market position and its contribution to Wipro’s overall performance.
Increased Client Satisfaction
Wipro reported improvements in customer satisfaction scores and Net Promoter Score (NPS), as indicated by a recent third-party annual survey. This reflects the company’s commitment to enhancing client relationships and service quality.
Decline in IT Services Revenue
Despite the positive developments, Wipro faced a decline in IT Services revenue, which fell by 0.8% sequentially and 1.2% year-on-year in Q4. The full-year IT Services revenue stood at $10.51 billion, a 2.3% decline year-on-year, posing a significant challenge for the company.
Weakness in European Market
The European market proved to be a weak spot for Wipro, with a sequential decline of 2.5% and a year-on-year decrease of 6.9%. This downturn significantly impacted the company’s overall performance, reflecting broader economic challenges in the region.
Challenging Macro Environment
Global industry uncertainty and recent tariff announcements have created a cautious spending environment among clients. This has affected transformation projects and discretionary spending, adding to the challenges faced by Wipro.
Negative Revenue Guidance
Looking ahead, Wipro provided guidance for a sequential revenue decline of between 3.5% and 1.5% for Q1 FY 2026. This forecast reflects ongoing macroeconomic uncertainties and cautious client spending, particularly in large transformation projects.
Forward-Looking Guidance
In light of the current challenges, Wipro has set a cautious outlook for the upcoming quarter. The company anticipates a sequential revenue decline of between 3.5% and 1.5% in constant currency terms. Despite the revenue challenges, Wipro remains focused on its strategic areas, including driving large deal momentum and maintaining operational efficiency.
In conclusion, Wipro’s earnings call highlighted a company navigating through a complex landscape of achievements and challenges. While there were significant wins in large deals and margin improvements, the decline in IT Services revenue and the European market’s weakness posed substantial hurdles. The forward-looking guidance suggests a cautious approach as Wipro continues to adapt to the macroeconomic environment.