Wipro Limited (NSE: WIPRO), a leading global information technology services company, saw its shares decline by 4.48% to ₹242.44 despite reporting better-than-expected quarterly results for Q2. The company's performance highlights a mix of strong deal momentum and revenue growth, coupled with market concerns about future guidance.

Key Financial Highlights

• Revenue: Wipro reported revenue of $2,604.3 million, representing a 0.7% quarter-on-quarter increase.
• Large Deal Bookings: The company secured $2.9 billion in large deal bookings, marking a significant 90.5% year-on-year growth.
• Total Bookings: Overall deal bookings reached $4.7 billion for the quarter.
• Operating Margin: IT services operating margin stood at 16.7%, impacted by a ₹1,165 million provision related to a customer bankruptcy.
• Adjusted Operating Margin: Excluding the provision, the adjusted IT services margin was 17.2%, showing a 0.4% year-on-year expansion.

Segment Performance

Future Outlook

Wipro provided revenue guidance for Q3, projecting IT Services business segment revenue to be in the range of $2,591 million to $2,644 million. This translates to a sequential guidance of -0.5% to +1.5% in constant currency terms.

Management Commentary

Srini Pallia, CEO and Managing Director, stated, "Our revenue momentum is strengthening, with Europe and APMEA returning to growth, and our operating margins holding steady within the narrow band. Bookings surpassed $9.5 billion for H1."

Aparna Iyer, Chief Financial Officer, added, "We are gradually returning to growth trajectory with three of our four SMUs growing sequentially in Q2. All key financial parameters continue to remain strong."

Market Response

Despite the strong performance, Wipro's shares experienced a decline, possibly due to mixed analyst opinions and concerns about future growth. Brokerage firms have expressed divergent views:

• Nomura maintains a Buy rating with a ₹280 target, citing strong deal wins.
• Motilal Oswal retained its Sell rating at ₹200, expressing growth concerns.
• Jefferies kept its Underperform stance at ₹220, noting potential margin pressure from deal ramps and acquisitions.

The market's reaction suggests that investors may be focusing on the company's future guidance and potential challenges in maintaining growth momentum amidst global economic uncertainties.

Conclusion

Wipro's Q2 results demonstrate the company's ability to secure large deals and maintain steady margins. However, the stock price decline indicates that market participants may be looking for more robust growth signals and clearer visibility on future performance. As the IT services landscape continues to evolve, Wipro's strategy to lead with AI and adapt to global shifts will be crucial in shaping its future trajectory.

Wipro Limited , a leading global information technology, consulting, and business process services company, has announced the signing of two significant deals, each valued at over $500 million, during the second quarter of the fiscal year.

Major Contract Wins Boost Wipro's Portfolio

The announcement of these substantial contracts comes as a positive development for Wipro, potentially strengthening its position in the competitive IT services market. A company executive revealed this information about the notable contract wins, highlighting Wipro's continued ability to secure high-value engagements.

Deal Details

While specific details about the nature of these deals or the clients involved have not been disclosed, the size of the contracts suggests they are likely to be comprehensive, long-term engagements. Deals of this magnitude often involve a wide range of services, potentially including digital transformation, cloud migration, application development and maintenance, or business process outsourcing.

Impact on Wipro's Financial Outlook

These large contracts may have a significant impact on Wipro's future revenue streams. Typically, deals of this size are executed over multiple years, providing a steady source of income and improving the company's revenue visibility.

Market Response

The news of these major deal wins may be viewed positively by investors and market analysts. Such large contracts often indicate a company's strong competitive position and its ability to deliver complex, large-scale IT solutions.

Broader Industry Implications

Wipro's success in securing these deals may also be indicative of broader trends in the IT services industry. It suggests that despite global economic uncertainties, companies continue to invest heavily in digital transformation and IT modernization initiatives.

As the technology landscape evolves, Wipro's ability to win such significant contracts demonstrates its continued relevance and adaptability in meeting the changing needs of global enterprises.

While these deals represent a notable achievement for Wipro, it's important to note that the successful execution of these contracts will be crucial in realizing their full value and impact on the company's long-term performance.