IT results Q4FY26: Focus on deals, acquisitions, and share buyback at Wipro’s upcoming earnings meet

After Tata Consultancy Services Ltd. reported its first-ever full-year decline in dollar revenue growth, Bengaluru-based Wipro Ltd. is set to announce its financial results on April 17.

In January, the company had guided that its IT services segment revenue for Q4FY26 would be in the range of $2,635 million to $2,688 million, implying a growth outlook of 0% to -2% in constant currency terms. However, market analysts expect the company’s quarterly performance to come in below the midpoint of this guidance range.  

Brokerage forecasts

Nomura analysts expect sequential revenue growth of 0.8% quarter-on-quarter in constant currency. They also anticipate the company will guide for revenue growth in the range of -1% to +1% in constant currency for Q1 FY27. “We expect adjusted EBIT margins to remain stable due to ramp-up cost of recently won large deals with upfront cost savings given to customers largely offset by currency gains. In Q3, reported margins had impact of provisions made for labour code changes,” a sectorial note by the brokerage said.   

Other brokerages such as Centrum and PL capital expect the sequential constant current revenue growth to be 0.6% and 0.8%, respectively, largely on the back of deals wins and ramp ups.  

While Wipro completed the $375-million acquisition of Harman Digital Transformation Services in the previous quarter to strengthen its engineering capabilities, both PL Capital and Motilal Oswal Financial Services expect margin contraction to reflect in the current quarter. PL Capital estimates a 30-basis points quarter-on-quarter decline, primarily due to the residual two-month impact of Harman integration while Motilal Oswal sees margins to be weighed down by Harman DTS-related dilution, wage hikes, and slower growth. 

Earlier this month, Wipro announced a large deal win with Singapore-headquartered Olam Group, a food and agri-business conglomerate. The eight-year, end-to-end transformation deal is expected to exceed $1 billion in total contract value, with a committed spend of $800 million.

As part of the deal, Wipro will acquire Mindsprint, Olam Group’s IT services arm, for $375 million, with the transaction expected to close in the quarter ending Q1FY27. In its report on the acquisition, Emkay Research noted that while Harman DTS is likely to contribute around 3% to revenue, it has not factored this into its Q4 estimates due to the pending deal closure. It also estimates that Mindsprint could contribute around 1.3% to revenue. 

Markets will also be looking for details on the proposed buyback. On April 9, in its communication to stock exchanges, Wipro said it would consider a proposal for a buyback of equity shares at its upcoming board meeting. This follows the company’s 2023 buyback, under which it repurchased 26.96 crore equity shares at a price of ₹445 per share, amounting to a total outlay of ₹12,000 crore.