Company Reports

Wipro's fiscal first-quarter constant-currency revenue growth of 1% year over year was at the midpoint of the guided range. Operating margin of 16% was flat with a year ago, as rupee depreciation benefits offset salary increases and continued investment in artificial intelligence.

Wipro provides a variety of IT services, including consulting, business process outsourcing, and customized application development. Similar to other Indian IT consultants, Wipro’s business model benefits from the arbitrage of salary differences between India and developed markets. However, many of Wipro’s India-based employees are with its business process outsourcing unit, where they handle repetitive workflows in customer support or administration. Since BPO work is usually less value-additive for customers than consulting projects, the labor arbitrage effect Wipro enjoys is also weaker than that of peers Tata Consultancy and Infosys.

Wipro's fourth-quarter revenue grew 8% year over year to INR 242 billion, benefiting from the Indian rupee's weakness. The company's full-year operating margin expansion of 20 basis points was healthy, but its fourth-quarter operating margin contraction over last year missed our expectations.

Wipro provides a variety of IT services, including consulting, business process outsourcing, and customized application development. Similar to other Indian IT consultants, Wipro’s business model benefits from the arbitrage of salary differences between India and developed markets. However, many of Wipro’s India-based employees are with its business process outsourcing unit, where they handle repetitive workflows in customer support or administration. Since BPO work is usually less value-additive for customers than consulting projects, the labor arbitrage effect Wipro enjoys is also weaker than that of its peers, Tata Consultancy and Infosys.

Wipro provides a variety of IT services, including consulting, business process outsourcing, and customized application development. Similar to other Indian IT consultants, Wipro’s business model benefits from the arbitrage of salary differences between India and developed markets. However, many of Wipro’s India-based employees are with its business process outsourcing unit, where they handle repetitive workflows in customer support or administration. Since BPO work is usually less value-additive for customers than consulting projects, the labor arbitrage effect Wipro enjoys is also weaker than that of its peers, Tata Consultancy and Infosys.

Wipro's performance notably improved this quarter, with revenue up 6% year over year to INR 236 billion, catching up with its Indian IT consulting peers. Adjusted operating margin of 17.6% also reached a new high in a tough environment where clients scrutinize their post-pandemic IT demand.

Wipro provides a variety of IT services, including consulting, business process outsourcing, and customized application development. Similar to other Indian IT consultants, Wipro’s business model benefits from the arbitrage of salary differences between India and developed markets. However, many of Wipro’s India-based employees are with its business process outsourcing unit, where they handle repetitive workflows in customer support or administration. Since BPO work is usually less value-additive for customers than consulting projects, the labor arbitrage effect Wipro enjoys is also weaker than that of its peers, Tata Consultancy and Infosys.

Wipro reported fiscal 2026 second-quarter revenue of INR 227 billion, down 3% year over year in constant currency. Total bookings grew 31% year over year in constant currency to $4.7 billion due to strength in large deal bookings, resulting in a book/bill ratio of over 1.8.

Wipro provides a variety of IT services, including consulting, business process outsourcing, and customized application development. Similar to other Indian IT consultants, Wipro’s business model benefits from the arbitrage of salary differences between India and developed markets. However, many of Wipro’s India-based employees are with its business process outsourcing unit, where they handle repetitive workflows in customer support or administration. Since BPO work is usually less value-additive for customers than consulting projects, the labor arbitrage effect Wipro enjoys is also weaker than that of its peers, Tata Consultancy and Infosys.

Bloomberg reported on Sept. 19 that President Donald Trump is expected to announce a new $100,000 fee on H-1B visa applications. Shares are down up to 5% for IT services providers with high offshore leverage, including Cognizant, Infosys, and Wipro.

Wipro provides a variety of IT services, including consulting, business process outsourcing, and customized application development. Similar to other Indian IT consultants, Wipro’s business model benefits from the arbitrage of salary differences between India and developed markets. However, many of Wipro’s India-based employees are with its business process outsourcing unit, where they handle repetitive workflows in customer support or administration. Since BPO work is usually less value-additive for customers than consulting projects, the labor arbitrage effect Wipro enjoys is also weaker than that of its peers, Tata Consultancy and Infosys.

We are transferring coverage of three major Indian IT services companies—Tata Consultancy Services, Infosys, and Wipro. These companies leverage low-cost offshore labor to deliver a variety of IT services, including consulting and business process outsourcing.

Wipro delivered a solid start to fiscal 2026, with revenue growing 1% in constant currency to INR 221 billion. Total bookings jumped 51% year-over-year to $5 billion, resulting in a book/bill ratio of over 1.9 and laying a foundation for sustainable long-term growth.

Narrow-moat Wipro reported fiscal 2025 fourth-quarter results that fell short of our and consensus’ estimates for revenue and profitability. We view this as a short-term issue amid ongoing macroeconomic and geopolitical uncertainties but recognize the risks to near- to medium-term demand if conditions continue to deteriorate. Management gave conservative guidance for the upcoming quarter, citing restrained discretionary spending and project delays, and we have adjusted our estimates accordingly. As a result, we have reduced our fair value estimate to INR 229/$2.67 per share from INR 241/$2.78. We view the shares as slightly overvalued.

Wipro is a leading global IT services provider with offerings ranging from software implementation to digital transformation consulting and servicing business operations teams. We think Wipro merits a narrow economic moat rating, like many of its peers, as we believe it benefits from switching costs and intangible assets, although we also see it benefiting from a cost advantage.

Narrow-moat Wipro reported decent earnings, which exceeded both our top- and bottom-line expectations. Management expects sales to remain roughly flat year over year in constant currency terms. The updated guidance implies results below our previous projections for the year, but we continue to be optimistic about a return in IT spending to drive long-term growth.

Wipro is a leading global IT services provider with offerings ranging from software implementation to digital transformation consulting and servicing business operations teams. We think Wipro merits a narrow economic moat rating, like many of its peers, as we believe it benefits from switching costs and intangible assets, although we also see it benefiting from a cost advantage.

Narrow-moat Wipro delivered a mixed second quarter, with the top line meeting our estimates and the bottom line exceeding expectations. Despite securing a solid volume of large deals, it wasn't sufficient to offset an overall decline in bookings. Even considering a robust margin growth this quarter, the company lowered its revenue guidance for the upcoming quarter and we attribute this to the challenges stemming from converting its order book into revenue. While its peers are beginning to recover from the slowdown in macro spending, Wipro has yet to experience similar benefits in its operations. On the heels of that, we maintain our fair value estimate of INR 450. We still believe the shares are overvalued, and we suggest that investors wait for signs of recovery in secular demand and clearer revenue visibility.

Wipro’s first-quarter results took a sharp turn from its peers Tata Consultancy Services and Infosys, with bookings down by double digits and the firm missing against consensus revenue, though beating on earnings per share. The quarter’s results support our continued belief that narrow-moat Wipro will lag its two Indian peers in top-line growth over the next five years, while still benefiting from vendor consolidation when up against smaller competitors. We are maintaining our fair value estimate of INR 450 as we believe that discouraging bookings indicate a relatively stable state for the rest of fiscal 2025, as opposed to gradual improvements we see for peers. Shares are moving toward our fair value estimate, with the stock down roughly 12% upon results.

We are maintaining our INR 450 fair value estimate for narrow-moat Wipro after the firm closed out fiscal 2024 with financial results impacted by a slowdown in customer spending on IT services as macro uncertainty persists. The slowdown in customer spending is not unique to Wipro. The firm’s closest competitors, Infosys and Tata Consultancy Services, also reported weak results and outlooks over the last week, as customers continue to delay projects that are more discretionary in nature. While the near-term picture remains murky, we reiterate our confidence in Wipro’s long-term opportunity as secular tailwinds such as digital transformations, cloud migrations, and increased usage of AI stand to drive strategic demand for IT services vendors such as Wipro.