Wipro Q1 Profit Up 11% to ₹3,330 Cr, Declares Dividend

On July 17, 2025, Wipro Ltd announced its first-quarter results for FY26, reporting a robust 11% year‑on‑year (YoY) increase in consolidated net profit to ₹3,330 crore, up from ₹3,003 crore in Q1 FY25. This performance surpassed market expectations, which had pegged net profit around ₹3,233 crore.

Top‑line growth was a modest 0.7–0.8% YoY, with revenue reaching approximately ₹22,135 crore (US $2.57 billion) in comparison to ₹21,964 crore a year ago. Analysts had predicted revenue around ₹22,078 crore, so Wipro slightly exceeded consensus.

However, sequentially, revenue and profit both declined: profit fell roughly 7%, from ₹3,570 crore in Q4 FY25, while in constant‑currency terms, IT services revenue decreased about 2.3% YoY.(https://www.wipro.com/)

Breaking Down the Numbers

Revenue Highlights:

• Consolidated revenue rose to ₹22,135 crore (+0.7% YoY).
• In USD terms, IT services revenue was $2.587 billion, down ~0.3% QoQ and 1.5% YoY.
• Constant-currency IT services revenue declined 2.3% YoY.

Profit and Margins:

• Consolidated net profit: ₹3,330 crore (+11% YoY), beating expectations.
• Profit was down ~7% QoQ from Q4 FY25’s ₹3,570 crore.
• Operating margins expanded 80 basis points YoY, reaching roughly 17.3%, though down slightly QoQ .
• Operating cash flow was strong at 123% of net income (~₹4,110 crore), up ~9.8% QoQ and 2.9% YoY.

Key Strategic Drivers: Deal Wins & AI Momentum

Wipro’s strong profit performance—despite flat revenue—was fueled by several strategic developments:

• Large-deal momentum: Q1 saw deal bookings of $4.97 billion, up 24.1% QoQ and 50.7% YoY, with “large deal bookings” (>$10 million TCV) reaching $2.666 billion (+49.7% QoQ, +130.8% YoY).
• Regional strength in the Americas, especially in healthcare and communications, helped offset challenges in other segments .
• AI-led solutions: CEO Srini Pallia emphasized that “AI is no longer experimental—it’s central to our clients’ strategies” and that Wipro is “delivering real impact at scale”.

Pallia noted, “In a quarter shaped by macroeconomic uncertainty, clients prioritized efficiency and cost optimization. We partnered closely with them … resulting in 16 large deals, including two mega deals.”

This deal momentum may help offset short-term revenue pressure and drive sustainable growth amid economic uncertainty.

Shareholder Rewards: Dividend Declared

In line with its revised capital return policy—targeting 70% cumulative net income payout over three years —Wipro declared an interim dividend of ₹5 per share (250% payout on ₹2 face value).

• Record date: July 28, 2025.
• Dividend payment date: On or before August 15, 2025.

Combined with a similar dividend in Q3, this places cumulative payouts in excess of $1.3 billion in the last six months, as noted by CFO Aparna Iyer .

Outlook for Q2 FY26

Wipro provided guidance for Q2 FY26 revenue in its IT services segment:

• Expected revenue of $2.56–2.61 billion, implying a flat to slight (+1%) QoQ constant-currency growth.
• Currency-neutral revenue expected to grow between -1.0% to +1.0% QoQ .

This outlook reflects cautious optimism, given macroeconomic pressures and discretionary spending headwinds, but emphasizes stability.

Macro Context: IT Sector Landscape & Peers

Wipro’s results should be seen within a broader canvas:

• The Indian IT sector has faced modest demand due to global macroeconomic uncertainty, tariff concerns, and client cost optimization.
• Peers such as TCS reported 6% YoY profit growth, while HCLTech saw a 10% YoY profit decline in their Q1 FY26 results.
• Three of Wipro’s five business segments experienced a sequential dip in revenue.
• Despite this, Wipro outperformed consensus numbers, driven by margin discipline and strong deal booking.

In this disciplined environment, Wipro’s ability to grow profit and secure high-value deals stands out relative to peers.

Management Commentary & Strategy

CEO Srini Pallia:

• Emphasized AI leadership: “AI is no longer experimental—it’s central to our clients’ strategies”.
• Described macro conditions as jitters-driven, pushing clients towards efficiency and astute cost management .
• Highlighted deal successes: 16 large deals with two mega transactions.

CFO Aparna Iyer:

• Noted operating margins expanded by 80 bps YoY, while operating cash flow reached 123% of net income.
• Reiterated enhanced shareholder returns, with ₹5/share interim dividend contributing to cumulative payouts over $1.3 billion in six months.

Segment & Geographic Performance

• Americas: Continue to be the biggest growth engine, particularly in healthcare and communications .
• Europe: Continues to remain weak, largely due to discretionary budget freezes and client caution .
• Industry verticals: Mixed, with certain verticals like retail seeing pressure, while digital, AI, and cost-transformation adoption drive new deal activity.

Strategic Takeaways

1. Margin excellence: The 80 bps YoY margin improvement showcases efficient cost management, particularly given flat revenue.
2. Cash generation: Operating cash flow at 123% of net income underscores strong internal liquidity, strengthening return-to-shareholder strategies.
3. Deal pipeline: The surge in large-booking TCV signals a healthy pipeline and future revenue visibility.
4. AI leadership: The emphasis on AI aligns with broader strategic tech trends and client demand.
5. Shareholder focus: Interim dividend and revised capital allocation policy reflect proactive return to investors.

Share Market Reaction

Wipro’s stock closed slightly lower (~1.5% drop) on the day of results announcement (₹258.75 on NSE), likely due to revenue stagnation concerns and broader market drift. Additionally, shares have seen a ~13.7% decline year-to-date, reflecting broader sector headwinds and valuation adjustments.

What Lies Ahead for FY26

• Q2 Outlook: Moderate guidance indicates further demand softness but also underscores stability.
• Deal conversion: Large pipeline and deal wins will be key to sustaining revenue performance.
• Macro factors: Recession concerns, tariff changes, and tight IT budgets could impact discretionary spends.
• Margins: Further gains possible via automation, optimizations, and operating leverage.

Final Takeaway

Wipro’s Q1 FY26 performance illustrates the power of profitability and cash flow enhancements in a subdued revenue environment. By leaning into cost discipline, high-value deal wins, and AI-led solutions, the company has set a strong base for delivering shareholder value—even if near-term topline momentum lags. The interim ₹5 dividend and revised capital return policy solidify Wipro’s positioning as a stable, Returns-focused play in the Indian IT landscape.