WIPRO Q1 FY27 earnings call.
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Revenue
₹24,479 Cr
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Revenue YoY
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EBITDA
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Wipro reported Q1 FY27 IT services revenue of $2.61 billion, flat-to-down sequentially (-1.2%) but up 0.9% YoY in constant currency, with operating margins at 16% (down 120bps YoY). Net income was INR 33.6 billion (+6% YoY) with EPS of INR 3.2. Margins were pressured by annual salary increments, large deal ramp-ups, and continued AI investments, partially offset by rupee depreciation and operational efficiencies. Geographically, Europe (+6% YoY) and APMA (+13.5% YoY, +4.4% QoQ) drove growth while Americas remained soft. Technology & Communications (+10.8% YoY) and Consumer (+1.9% YoY) outperformed, while Healthcare (-3% YoY) and EMR (-8.9% YoY) lagged. Order bookings of $3.4B with $1.6B in large deals (13 total) provide near-term visibility. Management guided Q2 sequentially at -1.5% to +0.5%, maintaining a medium-term target of 17-17.5% operating margin band. Key risks include prolonged macro uncertainty affecting discretionary spending, margin pressure from AI-driven deal structures, and competitive intensity on traditional cost-optimization work.
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Guidance to track
- IT services revenue expected in the range of $2.574 billion to $2.627 billion, reflecting continued macro uncertainty and geopolitical headwinds. The guidance includes full quarter contribution from MindPrint acquisition.
- Management reiterated commitment to returning to previously stated narrow margin band, citing operational levers including automation, pyramid restructuring, and utilization improvements. Simultaneous AI investment commitment acknowledged.
Risks flagged
- Total order bookings and large deal values declined significantly YoY. Management attributed this to timing and deal slippage to Q2, but the trend raises questions about pipeline conversion and competitive win rates.
- Margins on AI-driven deals vary significantly—premium realization on 'reimagine AI' projects vs. competitive pressure on traditional cost-optimization work. Token costs add complexity to total cost of ownership discussions with clients.
- US healthcare sector facing sustained demographic and regulatory pressures, resulting in budget constraints. Clients reallocating spend toward AI and compliance, creating uncertainty on timeline for recovery in this key vertical.
- Traditional IT and BPO budgets facing compression as clients demand AI deployment and cost optimization. Pricing pressure intensifying on legacy work while newer AI services remain nascent in scale.
Key quotes
- The reason why we had a drop of 120 basis points is number one the impact of MSI we had it's coming into this quarter. Second the investments that we are making in AI and in deals. That's the second part. Third is the acquisition some of the acquisitions that we made as they're actually coming into execution mode right now.
- Some of the decisions on some of these deals have actually slipped to quarter two. And you know, I always tell my team, when it slips, you got to really hold on. Don't let it slip because you know and try and let's close it in M1 M2 rather than wait for the M3.
- Large deals will remain competitive. You will have some amount of forward productivity that gets baked in. When you're looking at AI over smaller programs where you're looking at things like data modernization and you're looking at smaller pockets and you're looking at newer areas they will be accretive and that's been our experience thus far.
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