Wipro braces for a bumpy FY26 as revenue guidance sours investor mood

Bengaluru-headquartered Wipro Ltd, which announced its quarterly results after market hours on Wednesday, recorded a 2.7% decline in its full-year revenue. The company closed fiscal year 2024-25 with $10.51 billion in revenues and an operating margin of 17.1%, compared to revenues of $10.8 billion in FY24. However, the more worrying sign for FY26 comes from the weak guidance that the company has projected for the first quarter of the fiscal. Wipro expects its IT services revenue to be in the range of $2.50 billion to $2.55 billion in the coming quarter, which will be a sequential decline of 3.5% to 1.5% in constant currency terms.

Here are the top 3 takeaways from Wipro’s management commentary:

Demand Environment And Outlook

Wipro has guided for its revenue decline to be in the range of 3.5% to 1.5% in the first three months of FY26. Srini Pallia, MD & CEO of the company, told analysts that with the current visibility and the uncertainty in the environment, Wipro expects clients to take a more measured approach, especially on large transformation programmes and discretionary spending. Further explaining the rationale behind guidance, he said, “The upper end of the guidance is if we see the improvement in the demand situation from where we are today.

So, the lower end of the guidance will obviously have to factor in the worsening of the demand environment. So, we are somewhere in between that." That said, given that earlier in March, the company signed a large $500-million-plus long-term deal with British insurer Phoenix Group, the MD & CEO added that he expects this deal to ramp up from the second half of FY26 and would help lift Wipro’s revenues.

Elaborating on what is keeping the industry on tenterhooks, the company said it sees large transformation projects and programmes getting paused or being delayed, or schedules being changed. While Wipro sees budgets not being a problem, clients now want to review them after the uncertainty, especially those spenders who have cost pressures or direct impact of decisions.

However, the Wipro CEO said that current client conversations indicated that tech demand for efficiencies and cost reductions is likely to continue, especially around efficiency, automation, and Gen AI. The company also expects Europe to see an uptick in demand during the fiscal.

Large Deals and Clients

In the fourth quarter of FY25, while the company closed 17 large deals with a total contract value (TCV) of $1.8 billion, for the full year, it closed 63 large deals with a TCV of $5.4 billion, a year-on-year growth of 17.5%. However, the number of active clients of the company across the revenue buckets fell from 1,371 in FY24 to 1,282 in FY25. Even the large clients (those that bring in more than $100 million every year) fell from 22 in FY24 to 17 in FY25, but Wipro has been able to grow its revenue trickling in from its top clients. The top 10 customers of the company now make up for 23.3% of the overall revenue compared to 21.4% the previous fiscal. CFO Aparna Iyer noted that, “The number of active clients that you are seeing going down is just a reflection of the overall revenue environment and the lower discretionary spending."

Headcount and Hiring

During FY25, Wipro saw a net employee addition of 614 to its headcount, taking the overall employee base to 233,346, and it has also improved on the utilisation rate (excluding trainees), inching up to 85.6% from 84.8% in FY24. CHRO Saurabh Govil said that the company sees more headroom to improve its utilisation rates in the current low-growth environment. On hiring for FY26, he said, “We don't guide for the full year... we will have to take it as it comes from a growth perspective. We have a plan of onboarding people especially from campus on a regular basis. We are also very cognizant that we shouldn't do anything where we are on board and don't deploy..."