New Delhi, Apr 16 (PTI) 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.
Wipro CEO and MD Srini Pallia said clients remain cautious in the face of macroeconomic uncertainty, but Wipro is focused on partnering closely with them while keeping its gaze on consistent and profitable growth.
For Q1FY26, the firm sees its IT services business revenue between USD 2,505 million and USD 2,557 million, a drop of 1.5-3.5 per cent in constant currency (cc) terms on a sequential basis.
"The guidance is baked into all the uncertainties that we see, but I think the most important thing is what's happening in the macro environment. Today, in addition to the geopolitics this year, macro environment in the context of tariffs has created a lot of uncertainties to our clients and this uncertainty varies from country to country, markets to market, sectors by sectors," Pallia said during the company's earnings conference.
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 spending from specific verticals.
The USD 280-billion IT services company derives a large chunk of its revenue from US clients.
Pallia acknowledged that the recent tariff announcements have 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.
India's fourth-largest IT company's revenues for Q4 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 Americas 1 strategic market unit contributed 32.8 per cent of revenue in Q4, growing 6 per cent year-over-year in cc.
Europe, contributing 26.1 per cent of Q4 revenue, experienced a 6.9 per cent decline year-over-year in constant currency terms.
Pallia, however, expressed optimism for recovery in Europe.
"Our challenge continues to be Europe... you can see the de-growth that has happened, but what I can tell you is that we have a new team, and they have started the year with a large deal win which will start consuming in the quarters ahead, and there's a very strong pipeline in Europe," he said.
The BFSI sector remained the largest vertical at 34.2 per cent of Q4 revenue, showing a slight year-over-year constant currency growth of 0.8 per cent.
Net profit for Q4FY25 was up 25.9 per cent to Rs 3,569.6 crore.
The earnings per share for the quarter at Rs 3.4, 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 year slipped 0.74 per cent to Rs 89,088.4 crore.
"Client satisfaction scores improved, reflecting strong execution and engagement," said Pallia, who completes a year 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 continues to invest in global talent and in strengthening consulting and AI capabilities.
Wipro's employee count at the end of FY25 stood at 2,33,346.
Wipro did not specify hiring targets for FY26 but confirmed that it had recruited the intended numbers for FY25 (about 10,000).
"We don't guide for full year, we will take it as it comes from a growth perspective," Wipro's CHRO Saurabh Govil said.
For Q4FY25, total bookings were at USD 3,955 million, up 13.4 per cent quarter-on-quarter in constant currency. Large deal bookings were at USD 1,763 million, an increase of 48.5 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. Our endeavour will be to maintain the margin in a narrow band in the coming quarters," Wipro CFO Aparna Iyer said.
As FY26 commences, there are headwinds on an uncertain macroeconomic environment that is putting downward pressure on Wipro's revenues, she noted.
Govil said it is still early days to talk about wage hikes and added that the company will decide closer to the date.
"...we were the ones who did hikes ahead of time in September, we had done the previous time in December, so we are still very far from... and in an uncertain environment, we will decide closer to the date," he said.
Last week, TCS said that it will be deferring wage hikes to its 6.07 lakh employees due to the business uncertainties triggered by the tariff issues.
Meanwhile, the American Depositary Receipts of NYSE-listed Wipro slipped in US trading in the pre-market session, on the back of a weak Q1 outlook.
The company said the interim dividend of Rs 6 declared by the board at its January 17 meeting will be considered as the final dividend for FY25.
The country's largest IT firm TCS reported a 1.7 per cent decline in Q4 net profit to Rs 12,224 crore.
Its FY25 PAT 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.