Wipro's AI-led deal wins grow, but revenue outlook remains cautious

Wipro reported a mixed set of June-quarter results on Thursday, with strong AI-led large deal wins and double-digit revenue growth offset by margin pressure, muted profit growth and a cautious outlook for the current quarter, highlighting that India's IT recovery remains uneven despite rising enterprise AI spending.

The country's fourth-largest IT services company reported consolidated revenue of ₹24,479 crore, up 10.6% year-on-year, while net profit edged up 0.6% to ₹3,352 crore, missing Street expectations on both counts. Operating margins fell to 16%, a 15-quarter low, as wage hikes and investments in executing large transformation programmes weighed on profitability.

The Bengaluru-headquartered company projected sequential revenue growth of -1% to +1% in constant currency for the September quarter, signalling that discretionary technology spending remains subdued despite growing demand for AI-led transformation.

The standout metric for the quarter was Wipro's large deal momentum.

Large deal bookings rose sharply during the quarter, driven by enterprise programmes centred on AI, cloud modernisation and business transformation. The company said AI is increasingly becoming part of every strategic client conversation, with customers moving beyond experimentation to embedding generative AI into core business processes.

"Our clients continue to prioritise business transformation and cost optimisation while increasingly investing in AI-enabled capabilities," the management said during the earnings announcement, adding that the company's consulting-led approach is helping convert AI opportunities into larger transformation engagements.

Wipro has been repositioning itself around consulting, cloud and AI under its ai360 strategy, investing in proprietary AI platforms, industry-specific solutions and partnerships with hyperscalers including Microsoft, Google Cloud, NVIDIA and Amazon Web Services. The company has also integrated AI across software engineering, infrastructure services and business process operations.

However, analysts remain cautious about the company's near-term growth trajectory.

Reuters reported that Wipro's quarterly revenue missed analysts' estimates, while total deal bookings declined from the exceptionally strong year-ago period. Analysts also pointed to continued weakness in the Americas market and the company's dependence on legacy contracts compared with peers that have been gaining share in AI-driven transformation programmes.

The results contrast with a relatively stronger start to the earnings season for some larger rivals.

Earlier this month, Tata Consultancy Services exceeded revenue expectations, supported by strong banking demand and an annualised AI revenue run rate of $2.6 billion, although analysts cautioned that the broader IT services recovery would remain gradual. HCLTech has also maintained a relatively resilient outlook, aided by large engineering and digital transformation engagements.

Across the industry, executives continue to describe enterprise AI as the fastest-growing area of technology spending. While traditional application development and discretionary projects remain under pressure, clients are increasingly allocating budgets towards AI-powered automation, data platforms, cybersecurity and cloud modernisation.

For Wipro, the challenge will be converting a healthy pipeline of AI transformation opportunities into sustained revenue growth while protecting margins. The company's board also declared an interim dividend of ₹2 per equity share, with July 27 fixed as the record date.

Hiring remained measured during the quarter as Wipro balanced talent investments with demand visibility. The company said recruitment would continue to be aligned with business requirements, with a focus on AI, cloud, cybersecurity and consulting skills rather than broad-based hiring. The strategy reflects a wider trend across India's IT services industry, where companies are prioritising specialised talent and internal reskilling over large-scale campus recruitment as enterprise spending shifts towards AI-led transformation.