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Revenue & EBIT marginally misses estimates, PAT beats expectations

* Revenue for Q4FY25 came at INR 225.0Bn, up 1.3% YoY and up 0.8% QoQ (vs Consensus est. at INR 226.8Bn).

* EBIT for Q4FY25 came at INR 38.8Bn, up 9.5% YoY and 0.8% QoQ (vs consensus est. at INR 39.2Bn). EBIT margin was up 128bps YoY and flat QoQ to 17.3% (vs consensus est. at 17.2%).

* PAT for Q4FY25 came at INR 35.8Bn, up 25.5% YoY and 6.6% QoQ (vs consensus est. at INR 33.6Bn).

Q1FY26 revenue guidance of -3.5% to -1.5% CC reflects caution despite strong deal momentum:

Wipro reported strong deal wins in Q4FY25, closing 17 large deals with a TCV of USD 1.8Bn. For the full year, it secured 63 large deals worth USD 5.4Bn, reflecting a 17.5% YoY growth. However, Q1FY26 guidance indicates a cautious outlook amid macroeconomic uncertainty and tariff concerns. The company expects a sequential revenue decline of -3.5% to -1.5% in CC terms, translating to USD2.505Bn–2.557Bn. While demand for tech reinvention remains strong, clients are prioritizing cost optimization and AI-led efficiency, causing pauses and delays in large transformation programs especially across Consumer, Manufacturing, Automotive, and Industrial verticals. Europe continues to show weakness. However, we anticipate that a potential demand recovery later in the Q1FY26E is expected, particularly if tariff disputes of various countries with the US are resolved, enabling clearer client decisions. This optimism is reflected in the upper end of guidance. Additionally, the ramp-up of recent wins, such as the Phoenix deal, may boost revenue in the latter part of FY26. Nonetheless, a weak start makes achieving full-year positive growth a significant challenge.

Range-bound EBIT margin outlook despite pressures on pricing & consolidation:

As of Q4FY25, Wipro’s headcount grew to 233,346 with focus on AI upskilling & global talent. Key talent moved to client-facing roles, and a sponsorship program was launched. Attrition rate came at 15%. IT services EBIT margin was 17.5% in Q4, flat sequentially and up 1.1% YoY; FY25 EBIT margin rose to 17.1%. Despite facing headwinds from an uncertain macroeconomic environment that is putting downward pressure on revenues, the company anticipates maintaining the margin in a narrow band in the coming quarters. However, we expect that there will be pressure on margins in Q1FY26 due to a weak revenue environment, cost takeout and vendor consolidation deals as that comes with pricing pressure. Wipro will prioritize growth and investments in clients, and aims to manage costs through levers like bench cost management, productivity in fixed price programs, and optimization of fixed spends

View and Valuation:

Wipro’s outlook appears challenging due to macroeconomic uncertainty and tariff policies by US, leading clients to curb discretionary spending and delay major transformation projects. This cautious sentiment, reflected in Q1FY26 guidance, may pose headwinds to the company’s positive growth prospects in FY26. The company’s success hinges on leveraging its AI and consulting strengths and improving performance in key markets. Consequently, we’ve downgraded our rating to REDUCE and lowered the target pr

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