Wipro Shares Decline as Q3 Revenue Guidance Falls Below Forecasts Despite In-Line Q2 Results

Wipro Limited (NYSE:WIT) reported second-quarter financial results that met analysts’ expectations, but its revenue outlook for the third quarter fell below consensus forecasts, sending shares down 1.1% following the announcement.

The Indian IT services company reported adjusted earnings of $0.03 per share for the quarter ended 30 September 2026, matching Wall Street estimates.

Revenue reached $2.58 billion, also in line with expectations and representing a 9.1% increase compared with the same period last year.

However, growth in the company’s core IT services business remained limited, while weaker-than-expected guidance for the following quarter weighed on investor sentiment.

Third-Quarter Revenue Outlook Below Analyst Expectations

Wipro forecast IT services revenue of between $2.571 billion and $2.625 billion for the third quarter.

The midpoint of the guidance range, at approximately $2.598 billion, was below the analyst consensus estimate of $2.608 billion.

On a constant currency basis, the forecast represents sequential revenue growth of between negative 1.5% and positive 0.5%.

The guidance indicated that Wipro expects limited near-term growth in its IT services operations, with the lower end of the range pointing to a potential contraction in revenue.

The cautious outlook followed a quarter in which the company’s overall revenue increased year-on-year, but underlying IT services growth remained relatively subdued.

Wipro shares declined 1.1% following the publication of the results and guidance.

Revenue Increases 9.1% as IT Services Growth Remains Limited

Wipro reported second-quarter revenue of $2.58 billion, an increase of 9.1% compared with the corresponding period in 2025.

The result matched analysts’ expectations, although the performance of the company’s IT services segment showed more modest underlying growth.

On a constant currency basis, IT services revenue was unchanged from the previous quarter and increased 0.6% year-on-year.

The difference between overall reported revenue growth and constant currency IT services growth highlighted the importance of distinguishing headline financial performance from the underlying trends in the company’s principal business segment.

The limited sequential growth in IT services also provided context for Wipro’s third-quarter guidance, which suggested that demand conditions could remain challenging in the near term.

Chief Executive Officer and Managing Director Srini Pallia said the company’s strategic investments were beginning to contribute to its commercial activities.

“The strategic investments we have been making are beginning to deliver results. They are enhancing our ability to win in new markets, add new clients, and grow existing relationships,” Pallia said.

The comments reflected management’s focus on expanding its customer base and strengthening relationships with existing clients.

Operating Margin Improves to 16.5%

Wipro reported an operating margin of 16.5% for the second quarter, representing an improvement of 0.5 percentage points compared with the preceding quarter.

The increase indicated stronger operating profitability despite relatively flat sequential revenue in the IT services segment.

Chief Financial Officer Aparna Iyer highlighted the margin improvement alongside continued investment in the business.

“Our operating margin for the quarter was 16.5%, an expansion of 0.5% sequentially. We have delivered this improvement even while continuing to invest in our business and people,” Iyer said.

The improvement suggested that Wipro maintained a focus on operating efficiency while continuing to allocate resources towards its workforce and strategic initiatives.

However, the company also reported a decline in net income during the period.

Quarterly net income totalled $333.9 million, representing a decrease of 4.7% from the previous quarter and 1.9% compared with the same period last year.

The figures showed that the improvement in operating margin did not translate into higher net earnings during the quarter.

Large Deal Bookings Decline Sharply

Wipro reported weaker bookings during the second quarter, particularly in the large deals category.

Total bookings were reported at $2.595 million, representing a decline of 22.9% quarter-on-quarter in constant currency terms.

Large deal bookings reached $674 million, down 58.6% sequentially on a constant currency basis.

The substantial reduction in large deal bookings indicated a slowdown in the value of major contracts secured during the quarter.

Bookings are an important indicator for IT services companies because they provide information about new business commitments that may contribute to future revenue.

However, the timing of contract awards and the conversion of bookings into revenue can vary significantly between reporting periods.

The decline in large deal bookings, together with the company’s cautious revenue guidance, added to concerns about the near-term pace of business expansion.

Operating Cash Flow Rises to $553.6 Million

Despite the decline in net income and bookings, Wipro reported stronger operating cash flow during the quarter.

Cash generated from operating activities reached $553.6 million, representing an increase of 61.3% compared with the previous quarter.

Operating cash flow was equivalent to 165.8% of quarterly net income, indicating that cash generation exceeded reported earnings by a substantial margin.

The improvement provided a positive element within the company’s financial performance, particularly as underlying IT services revenue growth remained limited.

Strong operating cash flow can support investment, working capital requirements and other corporate financial priorities.

Wipro also reported voluntary employee attrition of 13.8% on a trailing 12-month basis.

The figure provides an indication of employee turnover within the business, an important operating measure for companies whose services depend heavily on skilled technology professionals.

Investors Focus on Revenue Growth and Contract Pipeline

Wipro’s second-quarter results presented a mixed picture of the company’s operating performance.

Revenue and adjusted earnings per share met analysts’ expectations, while operating margins improved and operating cash flow increased substantially.

However, IT services revenue remained flat sequentially in constant currency terms, net income declined and large deal bookings fell sharply from the previous quarter.

The company’s third-quarter revenue guidance also fell below consensus estimates, contributing to the negative share price reaction.

Investors will be monitoring whether Wipro can translate its strategic investments and customer relationships into stronger revenue growth and improved contract bookings in subsequent quarters.

The outlook for the third quarter suggests that near-term growth in the IT services business is likely to remain limited, despite the improvement in operating margins and cash generation recorded during the second quarter.

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