Wipro Reports Q2 IT Services Revenue of $2.61 Billion

Wipro (NYSE: WIT ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

The full earnings call is available at Summary Wipro Limited reported Q2 FY27 IT services revenue of $2.61 billion, flat sequentially and up 0.6% year on year in constant currency, with an operating margin improvement to 16.5%. Strategic initiatives include a focus on AI adoption across sectors, with significant traction in BFSI, technology, and energy, manufacturing, and resources sectors, supported by new deals and investments in AI services. Guidance for Q3 anticipates a sequential IT services revenue growth range of -1.5% to +0.5%, impacted by seasonal furloughs, with optimism for improved bookings due to a strong deal pipeline.

Operational highlights include signing nine large deals with a total contract value of $2.6 billion, progress in consulting-led, AI-powered transformation engagements, and strategic acquisitions such as Mindsprint enhancing market positions. Management remains optimistic about future growth driven by AI services and solutions, despite current challenges such as healthcare policy changes and client-specific issues in the Americas One region. Full Transcript OPERATOR Ladies and gentlemen, good day and welcome to Wipro Limited Q2 FY27 earnings conference call.

As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded and the duration for today's call will be 45 minutes. I now hand the conference over to Mr.

Abhishek Jain, Vice President, Corporate Treasurer and Head of Investor Relations. Thank you, and over to you, sir. Abhishek Jain, Vice President, Corporate Treasurer and Head of Investor Relations Thank you. Good evening.

Warm welcome to our Q2 FY27 earnings call. We'll begin the call with the business highlights and overview by Srinivas Pallia, our Chief Executive Officer and Managing Director, followed by updates on financial overview by our CFO, Aparna. Here we also have our CHRO, Saurabh Dawil, on this call. Afterwards, the operator will open the bridge for Q&A with our management team.

Before Srini starts, let me draw your attention to the fact that during this call we may make certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are associated with uncertainties and risks which may cause the actual results to differ materially from those expected. The uncertainties and risk factors are explained in our detailed filings with the SEC. Wipro does not undertake any obligation to update the forward-looking statements to reflect events and circumstances after the date of filing.

The conference call will be archived and the transcript will be available on our website. With that I would like to turn over the call to Srini. Srini, over to you. Srinivas Pallia, Chief Executive Officer and Managing Director Thank you, Abhishek.

Good evening. Thank you all for joining us today. This quarter, demand environment has remained largely unchanged. Our clients remain focused on efficiency and productivity while increasingly looking to accelerate AI adoption and drive long-term value.

This balance between efficiency and growth is shaping demand across industries. Let me begin with what we see in our priority sectors. In BFSI we continue to see strong momentum. Clients are focused on cost optimization, legacy modernization and scaling agentic AI across their enterprise.

Digital-native and new-age firms are driving demand in our technology sector. Investments in custom silicon, design to manufacture, and physical AI are creating opportunities across the engineering value chain. We also see growth emerging across AI model ecosystems from model training and evaluation to execution. In EMR — Energy, Manufacturing and Resources sector — we have seen some good wins in previous quarters and those deals are ramping up.

This sector continues to gain traction across markets. Specifically, I would like to call out PPS and Engineering. In consumer sector, we are seeing good traction in CPG, travel and transportation. Our recent new wins and revenue from the OLAM deal have also supported our performance in this sector.

However, healthcare in the US continues to be affected by policy changes. At the same time, cost pressures across payers and providers are creating new outsourcing opportunities. This, along with our differentiated platform-based offerings, and including rising regulatory requirements, are shaping our pipeline. Moving to our financial performance for the quarter.

In quarter two our IT services revenue stood at $2.61 billion, flat sequentially and up 0.6% year on year in constant currency. Our operating margin for the quarter was 16.5%, an improvement of 0.5% compared to last. Within our markets, three of our four SMUs — Strategic Market Units — reported sequential growth. Americas One declined sequentially due to client-specific issues and softness in healthcare.

Americas Two grew sequentially, driven by EMR with encouraging momentum in BFSI. Europe grew sequentially and year on year, delivering broad-based growth led by BFSI, Consumer and EMR. APMEA maintained strong traction, growing sequentially and year on year. Growth was fueled by Consumer Tech and Comms.

Coming to deal wins and pipeline, this quarter we closed $2.6 billion in total contract value and signed nine large deals. Our bookings reflect a healthy mix of new businesses and expansion of existing engagements. Let me give you an example of a consulting-led, AI-powered transformation deal. A global financial institution engaged Wipro to accelerate its transformation to an AI-enabled operating model.

This engagement will modernize software development, drive greater efficiency across the life cycle, and scale AI-powered ways of working, resulting in faster execution, broader AI adoption and an agile operating model for our client. This win, among others including a large deal in energy last quarter, reflects the growing impact of our consulting-led strategy in originating larger opportunities. Beyond large enterprises, we also see strong traction in deal wins and pipelines in the mid-market segment. These organizations understand that AI can be a force multiplier in scaling capabilities and redefining their competitive landscape.

As an example, a global mid-market consumer products company selected us to accelerate their technology transformation by establishing an AI capability center in India. Through this engagement, we will scale engineering and technology operations to support ERP modernization, cloud-native platforms and AI capabilities for our client. Outcome will drive innovation, improve engineering productivity and strengthen global delivery model for our client. We are beginning to see tangible returns from our strategic investments made in recent quarters.

Mindsprint has strengthened our position in food and agriculture, opening new market opportunities. Harman DTS has boosted our engineering capabilities, helping us win new logos and deepening existing client engagements. We will continue to make these investments even when they create near-term margin headwinds. They enhance our strategic position, expand addressable markets and build a stronger foundation for future growth.

In April, if you recollect, we launched our AI Native unit to help clients transition from traditional delivery models to AI-native enterprises. We are making rapid progress with over 2,000 engineers including FDEs — forward-deployed engineers. We are seeing growing success in outcome-based deals and driving nonlinear growth. This investment is already delivering results.

Let me share a few examples: 1) an SLM deployment for a major US retail bank; 2) implementation of an AI-powered digital plant for one of the largest petrochemical companies in the Middle East; and 3) an enrollment and billing SLM deployment for a leading US healthcare payer. In addition, we also built industry-specific SLMs for wealth management, insurance, healthcare, aviation and asset-intensive industries. Combined with our AI agent and orchestration platform, these capabilities enable us to transform virtually any business workflow into an AI-native workflow, helping our clients unlock new levels of productivity, speed and business value.

Based on growing traction in AI, we also accelerated investment in AI services and solutions across five emerging AI growth themes: AI data centers, AI Foundry Services, Physical AI, AI devices and design to manufacturing. In fact, these services and solutions position us well across the full AI value chain and help us capture opportunities that extend beyond traditional technology spend. With that, let me share our guidance for the next quarter. Q3 for us will remain impacted by seasonal furloughs.

We are guiding for a sequential IT services revenue growth of minus 1.5% to plus 0.5% in constant currency. Despite a challenging macro environment, our business remains resilient. We are very encouraged by emerging opportunities across markets. AI will expand new growth avenues and accelerate demand for higher-value transformation.

Signs of this are already evident in the momentum we are seeing across our new AI services. I will now invite Aparna to share details on our financials. Thank you. Over to you, Aparna.

Aparna Iyer, Chief Financial Officer Thank you, Srini. Good evening, everybody, and thank you for joining us. I'll share a quick update on the financial performance for quarter two and after that we can open it up for Q&A. Our IT services revenue grew 0.6% year on year in constant currency terms.

Revenues were flat sequentially in constant currency terms. Our operating margins for the quarter were 16.5%, an expansion of 0.5% sequentially. Operational improvements and rupee depreciation, offset by our continuing investments in business, have been the underlying factors driving this improvement. We will work towards improving the margins even as we create headspace for growth.

In terms of the SMU performance and sector performance, I'll share a few numbers. All of them are in constant currency terms. Americas Two grew 0.9% sequentially, declined 4.7% on a year-on-year basis. Europe grew 0.6% sequentially and grew 5.1% on a year-on-year basis.

APMEA grew 3.1% sequentially and 13% on a year-on-year basis. Our Americas One business was soft and declined 2.1% sequentially and 2.7% on a year-on-year basis. From a sector standpoint, BFSI grew 1% sequentially and 1.3% on a year-on-year basis. Consumer grew 2.6% sequentially and 6% on a year-on-year basis.

Energy, Manufacturing and Resources grew 1% sequentially while declining 6% year on year. Technology and Communications declined 2.6% sequentially while they continue to grow on a year-on-year basis at 7%. Health declined 3.8% sequentially and declined 6.5% on a year-on-year basis. In terms of other key financial parameters, our net other income, which includes the interest income, declined 68% sequentially primarily because the investable surplus reduced quarter on quarter owing to completion of a buyback in June 2026.

As a result of the lower other income, our net income was reported at 32 billion rupees for the quarter. It declined sequentially by 5%. However, the EPS, which is the right metric given that we completed a buyback, for the quarter was at 3.23 rupees, which increased 0.9% sequentially and 4.2% on a year-on-year basis. We remain relentless in our cash flow generation.

Quarter two is yet another quarter of robust operating cash flows. We generated 156% of net income. With this, our gross cash as of 30th September was at $4.6 billion. Our effective tax rate was at 23.9%, flattish compared to same quarter last year.

Accounting yield for the average investments held in India was at 7.1%. In terms of the guidance, like Srini said, we expect our revenues to be in the range of $2.571 billion to 2.6 to $5 billion. This translates to a sequential guidance of negative one and a half to a positive half percent in constant currency terms. You can now open the line up for Q&A.

Thank you. OPERATOR Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone.

If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take our first question from the line of Girish Bhai from BoB Capital Markets.

Please go ahead. Girish Bhai, Analyst at BoB Capital Markets Yeah, thanks for the opportunity. I would ask about the TCV number which is down quarter on quarter quite a bit, both from large deal and a total TCV perspective. Were these numbers up to your expectations?

If not, what exactly transpired in the quarter? Srinivas Pallia, Chief Executive Officer and Managing Director Hi, Girish. Srini here. As far as our TCV of quarter As far as Q2 is concerned, we had a few deals where the contract could not be signed on time, because of which they are slipping to this quarter, and both the deals that we could not sign will get signed.

As far as we are concerned, the pipeline is very robust and in addition to these two deals, we have a very strong pipeline for quarter three itself and we are very optimistic for better closure in quarter three as far as TCV is concerned. Girish. Girish Bhai, Analyst at BoB Capital Markets Okay. The other thing I want to ask you is regarding GCCs.

There seems to be a tendency of some customers selling off their GCCs to vendors like you. And I've seen this happen with HCL Tech and TCS and all that. So are there many more such deals in the pipeline? I mean, are there many more customers wanting to sell off the GCCs for whatever reason?

Srinivas Pallia, Chief Executive Officer and Managing Director So Girish, if you look at the GCCs, there are four opportunity areas. One is the greenfield where the client already has a GCC and looks at companies like us to come and help them to enhance and bring in AI transformation to that. Second, there are brownfield where we actually help the clients enhance their capabilities, and then there are some clients who would want to monetize their GCC. As far as we are concerned, we partner with our clients in all, whether it's greenfield, brownfield, or any monetization opportunities.

Girish Bhai, Analyst at BoB Capital Markets Okay. Lastly, when is the salary increase going to happen? Aparna Iyer, Chief Financial Officer Girish, you would note we just gave a salary increase effective 1 March 2025, 2026. So it's been just a few months since we rolled out.

So right now it's not under consideration. Girish Bhai, Analyst at BoB Capital Markets Okay, thank you. OPERATOR Thank you. We'll take our next question from the line of Sudhir Guntupalli from Kotak Mahindra AMC.

Please go ahead. Sudhir Guntupalli, Analyst at Kotak Mahindra AMC Yeah, hi, thanks for the opportunity. My question is as the AI tech diffusion happens from the hardware layer downstream into consulting and services. OPERATOR Sorry to interrupt you, we could not hear you properly.

Sudhir, Sudhir Guntupalli, Analyst at Kotak Mahindra AMC Hello. Hope I'm clear now. OPERATOR Yeah, much better. Sudhir Guntupalli, Analyst at Kotak Mahindra AMC Yeah, yeah.

No, Srini, thanks for the opportunity. And my question is as the AI tech diffusion happens from hardware layer downstream into consulting and services and the fact that most of the players are now look to be excessively leveraged in the overall ecosystem. So any thoughts on using your cash rich balance sheet to make very big bang acquisitions like we had done in the cloud wave beat, the likes of Capco, Rising, etc.? So any thoughts of using our net cash balance sheet this time around which could be a source of your competitive advantage?

Srinivas Pallia, Chief Executive Officer and Managing Director So Sudhir, if you look at broadly, our growth strategy is both organic and inorganic. As far as inorganic play is concerned, we look for opportunities which can enhance our strategy, which is consulting-led and AI-powered within the priority sectors and the markets that we go after. As far as acquisitions are concerned, our strategy will continue to be the same. We will look at opportunities that can enhance our value.

Just to give you a context here, if you look at the acquisition that we made with the Harman DTS, it actually gave us capabilities around design to manufacture and connected services. If you look at, as part of the OLAM deal, we actually acquired Mindsprint, and that has given us capabilities around food and agri sector supply chain and also farm-to-fork process. So we will look at those opportunities, Sudhir, and constantly look out for that. Sudhir Guntupalli, Analyst at Kotak Mahindra AMC Got it.

Srini, thanks. That's it from me. OPERATOR Thank you. We'll take our next question from the line of Ravi Menon from Axis Capital.

Please go ahead. Ravi Menon, Analyst at Axis Capital Thank you for the opportunity. In the downturn in spending started in BFSI, you guys were the first to be impacted because of the high exposure to consulting. Now when the spending is starting to pick up, at least it seems like it, from the results of your peers, BFSI seems to be doing well.