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Wipro Lags Rivals as Deal Wins Slide and Q4 Outlook Disappoints

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Wipro, India’s fourth-largest IT services provider, delivered a weaker-than-expected outlook for the current quarter on Friday after reporting its lowest deal bookings in six quarters, underscoring its struggle to keep pace with larger rivals amid uneven demand.

The Bengaluru-based firm said it expects revenue growth in the fourth quarter to range from flat to 2% sequentially, including contributions from acquisitions. That fell short of market expectations, with Kotak Institutional Equities forecasting growth of 1.5% to 3.5%. Following the announcement, Wipro’s U.S.-listed shares dropped as much as 7.2%.

The subdued guidance contrasted with stronger performances from bigger competitors such as Tata Consultancy Services and Infosys, both of which reported steadier deal wins and better-than-expected revenue in the seasonally weak third quarter.

“Wipro’s revenue growth was broadly in line with estimates, but deal wins were slightly below average. More importantly, its guidance is below street expectations,” said Anmol Garg, an analyst at DAM Capital.

Wipro reported total deal bookings of $3.34 billion for the December quarter, its weakest showing in six quarters, down from $4.69 billion in the previous quarter and $3.5 billion a year earlier. Consolidated revenue rose 5.54% year-on-year to 235.56 billion rupees ($2.59 billion), beating analysts’ average estimate of 233.91 billion rupees, according to LSEG data.

Net profit, however, fell 7% to 31.19 billion rupees, missing market expectations. The quarter included a one-time charge of 3 billion rupees linked to India’s new labour codes, adding pressure to earnings.

Analysts said margins remain under strain as Wipro continues to invest heavily in AI-driven delivery models while absorbing higher compliance costs and rising wages. “Wipro is prioritising long-term capability building, even as demand remains uneven,” said Gaurav Parab, an analyst at NelsonHall.

SECTOR SIGNALS TURN MIXED
The broader outlook for India’s $283 billion IT sector is showing tentative improvement. Smaller rival Tech Mahindra beat third-quarter revenue estimates on Friday, supported by stronger demand from communications clients.

After cutting back discretionary spending amid tariff-related uncertainty, clients are gradually increasing investment in AI-led projects. Wipro Chief Executive Srini Pallia said there is “a very clear shift towards AI-led transformation,” though the benefits have yet to fully translate into stronger deal momentum for the company.

Tech Mahindra struck a more optimistic tone. Chief Executive Mohit Joshi said the company expects to outperform peers in revenue growth next fiscal year, citing stabilising client spending in the United States and signs that Europe could move from stability into a growth phase.

For now, Wipro’s softer deal pipeline and cautious near-term guidance highlight the uneven recovery across India’s IT services landscape, even as AI-driven demand begins to re-emerge.

HCLTech Narrows Annual Revenue Outlook as Deal Momentum Strengthens

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HCLTech narrowed its annual revenue growth forecast on Monday, citing a stronger deal pipeline and a modest beat in quarterly revenue, even as global demand for discretionary technology spending remains muted.

The Indian software services exporter reported a 13.3% year-on-year rise in revenue to 338.72 billion rupees ($3.8 billion) for the quarter ended December 31, exceeding analysts’ average estimate of 330.46 billion rupees, according to LSEG data. New deal bookings during the quarter climbed to $3 billion, prompting HCLTech to revise its full-year revenue growth outlook to a range of 4% to 4.5%, compared with its earlier forecast of 3% to 5%.

Chief Executive C Vijayakumar said client spending is selectively returning in areas that support artificial intelligence adoption, though he cautioned that overall demand is unlikely to rebound to post-pandemic peaks. “While uncertainty persists in the global market leading to slowing growth, the fundamental demand for technology as a driver for business transformation remains structurally intact,” he said during a post-earnings briefing.

Analysts viewed the updated outlook as a positive signal. Jefferies said the revised guidance provides “stronger visibility for growth in FY27,” while Centrum Broking analyst Piyush Pandey noted that the results were encouraging despite the December quarter typically being seasonally weak for IT firms.

India’s $283-billion IT services sector continues to face headwinds from cautious client spending in the United States, where macroeconomic uncertainty and geopolitical tensions have delayed non-essential technology investments. Earlier on Monday, industry leader Tata Consultancy Services also posted revenue slightly above expectations. Peers Infosys, Wipro, and Tech Mahindra are scheduled to report earnings later this week.

HCLTech’s quarterly profit fell 11.2% to 40.76 billion rupees, missing analysts’ forecasts, after the company took a one-time charge of 9.56 billion rupees linked to the impact of India’s new labour codes.