Wipro Q4 PAT up 26%; co sees up to 3.5% drop in IT services revenue for Q1FY26 amid macro woes

New Delhi: Wipro on Wednesday reported a 25.9 per cent year-on-year rise in consolidated net profit for the March quarter to Rs 3,569.6 crore, but warned of a weak quarter ahead with up to 3.5 per cent expected drop in IT services revenue for Q1FY26, amid global uncertainties.

CEO and Managing Director Srini Pallia said clients remain cautious in the face of macroeconomic uncertainty. He assured that Wipro is focused on partnering closely with them, while keeping its gaze on consistent and profitable growth.

Over the past weeks, US' on-now, off-now tariff moves have roiled global markets and many IT analysts fear that a bitter trade war and a possible slowdown in the American economy could take a toll on IT decision-making or curtail tech demand and spends from specific verticals.

The USD 280 billion IT services company derives a large chunk of its revenue from US clients.

At Wipro's earnings conference on Wednesday, Pallia acknowledged that the recent tariff announcements have only added to the global uncertainties.

"The global industry environment remained uncertain for most of the year. And, of course, the recent tariff announcements have only added to that. Even though the underlying demand for the tech re-invention remains strong, our clients are approaching it more cautiously," he said.

Revenues for the fourth quarter (Q4) of FY25 came in at Rs 22,504.2 crore, a marginal increase of 1.33 per cent from Rs 22,208.3 crore in Q4 FY24.

The net profit (attributable to equity holders of the company) for Q4FY25 was up 25.9 per cent to Rs 3,569.6 crore. Seen sequentially, the profit and revenue rose 6.43 per cent and 0.83 per cent, respectively.

The earnings per share for the quarter at Rs 3.4 (USD 0.04), translated into an increase of 6.2 per cent quarter-on-quarter and 25.8 per cent on the year-ago period.

For full FY25, profits rose 18.9 per cent to Rs 13,135.4 crore. Revenues for the full fiscal year slipped a tad (0.74 per cent) to Rs 89,088.4 crore.

But the biggest disappointment, however, is its Q1FY26 guidance.

For June quarter, the Bengaluru-headquartered firm sees revenue from its IT services business in the range of USD 2,505 million to USD 2,557, which marks a drop of 1.5-3.5 per cent in constant currency terms on a sequential basis.

"As clients remain cautious in the face of macroeconomic uncertainty, we're focused on partnering closely with them while staying committed to consistent and profitable growth," Pallia said.

Wipro closed FY25 with two mega deal wins, an increase in large-deal bookings, and growth in top accounts, he said.

"Client satisfaction scores improved, reflecting strong execution and engagement," says Pallia who completes a year at the helm, as the top boss of Wipro.

The company -- which competes with larger peers like TCS and Infosys for contracts in global and domestic markets -- asserted that it continued to invest in global talent and in strengthening consulting and AI capabilities.

Wipro's employee count closed at 2,33,346, slightly higher than 2,32,614 in the same period previous year.

For Q4FY25, the total bookings was at USD 3,955 million, up 13.4 per cent quarter-on-quarter in constant currency. The large deal bookings was at USD 1,763 million, an increase of 48.5 per cent year on year.

The IT services operating margin for Q4, FY25 was at 17.5 per cent, flat quarter-on-quarter and expansion of 1.1 per cent year-on-year.

"For Q4, operating margins expanded 110 basis points year-on-year and for the full financial year margin expanded by 90 basis points. Our focus on execution rigour has ensured that our margins have steadily expanded even in a softening revenue environment. We will endeavor to maintain the margin in a narrow band in the coming quarters," Wipro Chief Financial Officer Aparna Iyer said.

The company did not specify hiring targets for FY26, but confirmed that it had hired the intended numbers for FY25 (about 10,000).

"We don't guide for full year (on hiring), we will take it as it comes from a growth perspective," Wipro's Chief Human Resources Officer (CHRO) Saurabh Govil said.

For the full fiscal year, large deal bookings were at USD 5.4 billion, up 17.5 per cent year-on-year. Total bookings were at USD 14.3 billion, a decline of 3.8 per cent year-on-year.

The company said the interim dividend of Rs 6 declared by the board at its January 17 meeting will be considered as final dividend for the 2024-25 financial year.

Wipro is the second largest Indian tech company to declare results in the ongoing Q4 earnings season, after Tata Consultancy Services posted its report last week.

The country's largest IT services firm TCS reported a 1.7 per cent decline in the March quarter net profit to Rs 12,224 crore, hurt largely by a margin contraction.

The Tata Group company also announced that it will be deferring wage hikes to its 6.07 lakh employees due to the business uncertainties triggered by the tariff issues. Its FY25 net profit increased 4.2 per cent to Rs 48,553 crore on the back of a 6 per cent growth in revenue to Rs 2.55 lakh crore or over USD 30 billion.