Wipro (NYSE:WIT) used its fiscal third-quarter earnings press conference to highlight steady sequential growth, improved profitability, and what executives described as a clear client shift toward AI-led transformation and cost optimization. Management also reiterated fourth-quarter revenue guidance of flat to modest growth in constant currency terms, while noting fewer working days and some delays in deal ramp-ups.
Management sees AI moving to the center of client priorities
Chief Executive Officer and Managing Director Srini Pallia said AI has become a “standing board-level mandate” at many clients, influencing how organizations plan and invest. He added that themes seen in recent quarters—deal momentum, cost optimization, vendor consolidation, and a shift toward AI-led transformation—continued in the third quarter.
- Industry platforms and solutions, including examples such as Payer AI in healthcare, NetOxygen for lending, and AutoCortex for automotive.
- Delivery platforms such as Winx (bringing AI into operations across application management, infrastructure support, and business process operations) and Vega (AI-driven capabilities across the development lifecycle, including coding assistance, model tuning, and data pipelines).
- The Wipro Innovation Network, linking labs with partners, startups, universities, and deep-tech talent; Pallia said the company launched innovation labs in three cities across the U.S., Australia, and the Middle East in December.
On the demand environment, Pallia said clients are still focused on taking “cost outs” through consolidation and productivity improvements, with AI increasingly “front and center” in pipeline opportunities. He said January budget cycles would provide more clarity on discretionary spending, which the company is “closely watching.”
Quarter results: sequential growth, broad-based performance, and margin expansion
Pallia reported IT services sequential revenue of $2.64 billion, up 1.4% quarter-over-quarter in constant currency. Excluding the Harman DTS acquisition, he said revenue grew 0.6% in constant currency terms. He characterized growth as broad-based, with three of four market units and four of five sectors posting sequential gains.
Chief Financial Officer Aparna Iyer said IT services revenue rose 1.4% sequentially in constant currency and 1.2% sequentially in reported currency, and increased 0.2% year-over-year in reported currency. Iyer said the constant currency growth included a 0.8% contribution from the Harman DTS acquisition, which she said was closed during the quarter.
Operating margin for the quarter was 17.6%. Iyer said this represented a 40-basis-point expansion over adjusted second-quarter margins and a 10-basis-point improvement year-over-year, calling it “one of our best margin performances in the last few years.” She attributed margin drivers to higher utilization, improved profitability in fixed-price programs, SG&A optimization, improved margins from acquired entities as synergies were realized, and foreign exchange benefits from a depreciating rupee.
Adjusted net income was INR 33.6 billion and adjusted EPS was INR 3.21, up 3.5% sequentially and flat year-over-year, according to Iyer.
Bookings and deal commentary: quarterly lumpiness but strong year-to-date growth
Wipro reported $3.3 billion in total contract value (TCV) for the quarter and $871 million in large deal bookings. In Q&A, executives addressed questions about a sequential decline in TCV and large deal totals, emphasizing the variability of deal timing.
Pallia said year-to-date TCV stood at about $13 billion, up 25% year-over-year, and described the pipeline as “very strong,” spanning both large and smaller deals across markets and industries. Iyer added that year-to-date TCV was growing “well over 20%” and that year-to-date large deal bookings totaled $6.3 billion, up “nearly north of 50%” year-over-year. She also noted that Wipro had four mega deals in the first half of the year, contributing to earlier-period strength.
Asked whether AI was compressing deal values, Iyer said it was not, arguing that lumpiness was the bigger factor and that AI was “leading to more deals and more decisions.”
Harman DTS acquisition, workforce updates, and one-time charges
Pallia said the Harman DTS acquisition adds engineering and AI capabilities that complement Wipro’s offerings and strengthens its engineering global business line, while opening opportunities in new regions and industries. Iyer said Harman contributed 0.8% to third-quarter constant currency revenue growth and added that the company’s fourth-quarter guidance includes the full quarter’s Harman revenues (without separately breaking them out).
Iyer also highlighted two one-off charges recorded in the P&L that affected net income and EPS but were not included in IT services segment operating margins: INR 302 crores in additional graduate expenses tied to Labor Code implementation, and about INR 263 crores related to a restructuring exercise completed during the quarter. She said the restructuring is complete and the company does not anticipate further charges. Later, she added that she does not expect any continuing Labor Code impact.
On headcount, Chief Human Resources Officer Saurabh Govil said additions reflected the Harman acquisition as well as a “rebadging” of employees connected to a large deal referred to as “Phoenix.” He said campus hiring was muted in the quarter, with about 400 new graduate additions, and that the company planned to increase campus hiring to about 2,500 in the next quarter. He also said Wipro had hired more than 5,000 freshers so far in the fiscal year and now expects to end the year at roughly 7,500 to 8,000, compared with a prior target of 10,000.
Govil said Wipro is building campus “centers of excellence” with universities in areas such as AI, cybersecurity, data, and engineering. On pay, he said premiums are generally paid for experienced hires with client experience, while Wipro is investing earlier in campus programs to develop the right profiles. Govil also said there was no change in bench policy, and that while U.S. immigration scrutiny has increased, Wipro has not seen significant issues and is ensuring employees are well prepared.
Guidance and shareholder payout
For the fourth quarter, Wipro guided IT services revenue to $2.635 billion to $2.688 billion, implying 0% to 2% sequential growth in constant currency. Iyer said guidance factors include fewer working days and delays in ramp-ups on some large deals won earlier in the year. She also noted the company expects incremental margin dilution from Harman DTS in the fourth quarter, while aiming to keep margins in a similar band to recent quarters.
Iyer said the board declared an interim dividend of INR 6 per share. She added that cash distributed to shareholders during the current financial year will exceed $1.3 billion and that Wipro has “significantly exceed[ed]” the minimum floor in its capital allocation policy for the fiscal year ending FY 2026.
About Wipro (NYSE:WIT)
Wipro Limited (NYSE: WIT) is an Indian multinational corporation that provides information technology, consulting and business process services. Headquartered in Bengaluru, India, the company traces its origins to 1945 when it was founded as Western India Vegetable Products and later diversified into technology and IT services. Today Wipro positions itself as a provider of enterprise IT solutions and digital transformation services for large and mid-sized organizations across multiple industries.
The company’s service portfolio includes application development and maintenance, cloud and infrastructure services, data analytics and AI, cybersecurity, digital consulting, product engineering and research and development, as well as business process services.
