Wipro likely to stay in slow lane amid challenging business scenario

Wipro’s fourth quarter performance, weak on key parameters, resonates the sector wide slack amid delayed ramp ups of large, multi-year transformational projects. Global clients prefer to wait and watch the developing scenario on trade tariffs and its possible effects on their profitability, which has hampered decision making and the budget allocation exercise, which is typically carried out during the March quarter every year. Additionally, the revenue guidance for the June quarter, predicting a 1.5-3.5% sequential drop in constant currency (CC), is the most bearish projection by the country’s fourth largest IT exporter compared with the reported top line numbers in the past five quarters to March 2025. That means no quick turnaround in the business momentum unless sufficient clarity emerges on the US reciprocal tariff front in coming weeks.

In a media conference on Wednesday after declaring the quarterly performance, Wipro’s management cited that clients are taking a more measured approach while allocating capital to large transformational deals. Amid the uncertain global trade scenario, rethinking supply chain management and cost optimisation to protect profitability as the top line takes a hit, have become the major focus areas for clients.

This spells more woes for Wipro which has managed to cross 1% sequential revenue growth in dollar terms on a reported basis in just one out of the past 10 quarters to March 2025 and has failed to do it in CC terms in the said period. Its large peers including Tata Consultancy Services (TCS), Infosys, and HCL Technologies have been more frequent at achieving that feat. As a result, Wipro’s full year dollar revenue change has lagged that of peers in each of FY23 and FY24 after outpacing them in FY22. In FY25, its revenue at $10.5 billion fell by 2.7%. TCS, the largest peer, reported 3.8% growth in revenue at $30.1 billion. The other two peers are slated to report March quarter numbers over the next few days.

Another area of concern is the year-on-year erosion in the number of clients at the end of FY25 in various categories based on the range of total contract values (TCVs). While the business environment has been tough during the period, TCS still has managed to show a moderate improvement on this front.

A sliver of hope is the sustained momentum in deal wins and growth coming from large clients, similar to TCS. Wipro reported $3,955 million worth of new deal wins for the March quarter, the highest in eight quarters. Also, business from the top 10 clients grew by 3.2% year-on-year in the fourth quarter. Employee attrition cooled off marginally to 15% from 15.3% in the previous quarter. The company’s stance on hiring and salary raise will depend upon the business trend in the coming quarters. Given the short term challenges, the stock may remain under pressure.