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Wipro reported a mixed June quarter. Revenue grew at a healthy pace, but profit was almost flat and its core IT business remained under pressure.
By the numbers:
Revenue: ₹24,479 crore, up 10.6% YoY
Net profit: ₹3,356 crore, up just 0.6% YoY
IT services revenue: $2.61 billion, down 1.4% QoQ
Constant currency growth: down 1.2% QoQ, up 0.9% YoY
Constant currency measures a company's revenue growth after removing the impact of exchange rate changes, showing its actual business performance.
Operating margin: 16%, down from 17.3% last quarter
Total bookings: $3.37 billion
Large deal bookings: $1.63 billion, up 12.9% QoQ
In simple words, more money came into the business, but a much larger share of it was also spent.
Why did profit barely grow: the company faced higher employee costs after salary hikes, while it also spent money to begin work on recently won large contracts.
Winning a deal does not immediately mean pure profit. Wipro first has to hire or move employees, build teams, set up technology systems and begin delivering the project. These early expenses arrive before the full revenue starts flowing in.
The company is also investing heavily in AI tools, employee training and new capabilities. These investments may help it win future business, but they reduce profitability in the short term.
Big picture: there was one important positive.
Wipro signed $1.63 billion worth of large deals, up nearly 13% from the previous quarter. These are contracts worth at least $30 million each.
Large deals are important because they can provide revenue for several years. But there is usually a delay between winning a contract and earning meaningful money from it.
Think of it like receiving a big catering order for a wedding. The booking is valuable, but you still need to buy supplies, hire workers and do the work before the money turns into profit.
What next: Wipro expects its IT services revenue in the September quarter to range between a 1.5% decline and 0.5% growth in constant currency.
That is a cautious forecast. At the lower end, business could shrink again. Even at the upper end, growth would remain almost flat.
So, management is essentially saying that a sharp recovery is not visible yet.
