Wipro announced its Q2 FY’26 results during an earnings call. Key highlights include IT services revenue of $2.6 billion, a sequential growth of 0.3% in constant currency, and an adjusted operating margin of 17.2%. The company secured significant deals and anticipates revenue growth in specific sectors, while also addressing margin pressures and strategic initiatives involving AI and automation. Wipro is projecting Q3 sequential revenue growth to be between -0.5% and +1.5%.
Financial Performance
In the second quarter, Wipro’s IT services revenue reached $2.6 billion, reflecting a sequential increase of 0.3% in constant currency. The adjusted operating margin for the quarter stood at 17.2%, marking a 0.4% improvement compared to the previous year. Despite these gains, revenue experienced a year-on-year decline of 2.6% in constant currency terms.
Segment Highlights
Three out of four strategic market units (SMUs) demonstrated sequential growth. Americas 1 showed strong results, driven by healthcare and technology sectors. Europe also returned to sequential growth, led by the BFSI sector. APMEA’s growth was driven by strong results in India, Australia and Southeast Asia. Capco also saw growth, with momentum in LATAM and APMEA.
Deal Wins and Pipeline
Wipro closed deals worth $4.7 billion in total contract value and signed 13 large deals during the quarter, including two mega-deals in the healthcare and BFSI sectors. These deals are expected to deepen Wipro’s presence and unlock future growth. One partnership involves modernizing a leading UK financial company using Wipro’s WeGA AI platform. Wipro is also introducing Wipro Intelligence, a suite of AI-powered platforms and solutions.
Strategic Outlook
Wipro is projecting sequential IT services revenue growth to be between -0.5% and +1.5% in constant currency for the next quarter (Q3). The company aims to convert its strong backlog into revenue while maintaining operational discipline. Key sectors of focus include BFSI (where cost optimization and modernization are priorities), Technology and Communications (accelerating AI adoption), and Healthcare (supporting clients through structural changes).
Margin Considerations
Wipro’s operating margins for Q2 stood at 16.7%, contracting by 60 basis points quarter-on-quarter and 10 basis points year-on-year. These margins were impacted by a one-off charge from a client bankruptcy event. Without this event, adjusted margins would have been 17.2%, a 40 basis point expansion year-on-year.
AI and Automation
Wipro is focused on bringing advanced AI to various business and technology streams, including HR, mortgages, and IT. This initiative aims to optimize workflows and support real-time decisions for clients. The company is also partnering with a European distribution and logistics company for a multi-year transformation of their operations and IT. Wipro Intelligence is designed to help clients scale with confidence and lead in an AI-first world.
Additional Financial Metrics
Net income and EPS grew by 1% year-on-year. Operating cash flows remained higher than net income, representing 104% of net income for Q2. Gross cash, including investments, totaled $6 billion for the quarter. The effective tax rate (ETR) was 23.8% for Q2 FY’26, compared to 24.6% in the same quarter of the previous year.
Source: BSE
