HCLTech vs Wipro Q4 FY26

HC

HCLTech

Q4 FY26 · Information Technology

HCL Tech reported Q4 FY26 revenue of $3.68B, up 2.4% YoY but down 3.3% QoQ, missing expectations due to delayed procurement decisions and discretionary spending cuts by two large US telecom clients. Services revenue grew 4.2% YoY while software declined 14% YoY. Full-year revenue grew 3.9% in constant currency, with services up 4.8%. EBITDA margin (ex-restructuring) was 17.7%, down 20bps YoY. Management guided FY27 revenue growth of 1-4% (services 1.5-4.5%) and EBIT margin of 17.5-18.5%, reflecting headwinds from two client-specific reductions (~50bps) and continued soft discretionary spend. AI momentum remains strong with $155M quarterly advanced AI revenue (+6.1% QoQ) and a $100M+ AI factory deal. Key risk: further escalation of tariff volatility or client-specific issues could pressure growth.

Guidance read

FY27 revenue growth 1-4% CC: Consolidated revenue growth guidance for FY27 in constant currency; services growth 1.5-4.5%. FY27 EBIT margin 17.5-18.5%: Operating margin guidance for FY27, excluding impact of acquisitions. Two clients to cause ~50bps growth headwind in FY27: Specific client reductions in manufacturing and retail will impact growth by about 50 basis points. AI native services to grow 25-30%: Management expects advanced AI services (AI factory, custom silicon) to grow at 25-30% annually.

Risk read

Key risks include Telecom discretionary spending cuts may persist — Two large US telecom clients cut discretionary spend in Q4; impact expected to continue through calendar 2026.; AI deflation could accelerate beyond 2-3% — Analyst questioned if deflation from AI could expand; management acknowledged risk but maintained 2-3% estimate for HCL.; Software revenue volatility from government deals — Q4 software revenue missed due to delayed US government decisions; timing of closures unpredictable.; Geopolitical uncertainty in Europe — Management noted softness in Europe due to geopolitical escalations, which could worsen..

Promise ledger

Of 1 tracked promise, management 0 met, 0 close, 1 missed.

WI

Wipro

Q4 FY26 · Diversified

Wipro's Q4 FY26 IT services revenue of $2.65B declined 2% YoY in constant currency, with operating margin contracting 30bps to 17.3%. Sequential growth of 2% was driven by Americas1, Europe, and APMEA, but Americas2 declined sharply due to client-specific issues and delayed ramp-ups in BFSI. Large deal bookings totaled $3.5B, including a $1B+ Olam deal. Management guided Q1 revenue between $2.597B-$2.651B, implying -2% to 0% sequential growth, absorbing wage hikes and deal ramp-up costs. Margins are expected to remain in a narrow band medium-term, but near-term volatility from investments in the new AI-native unit and large deal transitions poses risk. The key risk is sustained weakness in Americas2 BFSI if client issues persist beyond Q1.

Guidance read

Q1 FY27 Revenue Guidance: -2% to 0% sequential CC: IT services revenue expected between $2.597B and $2.651B, reflecting seasonal weakness and client-specific issues. Medium-term margin band maintained: Management aims to keep operating margins in a narrow band despite wage hikes, deal ramp costs, and AI investments. Buyback of ₹15,000 crore at ₹250/share: Largest buyback in Wipro's history, expected to complete in Q1 FY27, subject to shareholder approval.

Risk read

Key risks include Sustained weakness in Americas2 BFSI — Client-specific issues and delayed ramp-ups may persist beyond Q1, impacting growth in a key market unit.; Margin pressure from large deal ramp-ups — New large deals won competitively may have lower initial margins, adding to near-term margin volatility.; Geopolitical and tariff disruptions — Clients in manufacturing and auto sectors are cautious due to tariffs, potentially delaying IT spending decisions..

Promise ledger

Scorecard data is being built as historical quarters are processed.