The brokerage flagged the IT major's weak Q4FY25 quarter, with IT services revenue falling short of expectations. It also pointed to a subdued Q1FY26 revenue guidance, reflecting macro uncertainties from global tariffs. With limited visibility on FY26 growth, the brokerage said Wipro's turnaround thesis looks challenged.
Another domestic broker also downgraded Wipro to 'Reduce', with a target price of Rs 252. The brokerage expects a potential demand recovery later in Q1FY26, particularly if global tariff-related disputes are resolved. However, a weak start makes full-year positive growth a challenge. Margins are expected to remain under pressure due to a soft revenue environment, pricing constraints from cost takeout deals, and vendor consolidation, it added.
On Wednesday, the IT major announced that its consolidated net profit grew 6.43% to Rs 3,569.6 crore in Q4 FY25 as against Rs 3,353.8 crore posted in Q3 FY25. However, revenue from operations increased marginally to Rs 22,504.2 crore in Q4 FY25 as against Rs 22,318.8 crore reported in Q3 FY25.
On a year-on-year (YoY) basis, the IT firm's net profit grew 25.92%, while revenue rose 1.33% in Q4 FY25. Profit before tax was at Rs 4,743 crore during the quarter, up 6.50% quarter on quarter (QoQ) and up 22.80% YoY.
In dollar terms, Wipro's gross revenue for Q4 FY25 stood at $2,634.2 million, registering a 0.8% increase QoQ and a 1.3% rise YoY. The revenue from its IT services segment was $2,596.5 million, marking a decline of 1.2% QoQ and 2.3% YoY.
In Q4 FY25, Wipro's IT services segment reported an operating margin of 17.5%, remaining flat compared to the previous quarter (QoQ) while showing a YoY expansion of 1.1%. The Non-GAAP constant currency revenue for the IT services segment decreased by 0.8% QoQ and 1.2% YoY.
During the quarter, the IT company's total booking was at $3,955 million, up by 13.4% QoQ in constant currency. Large deal booking was at $1,763 million, an increase of 48.5% YoY in constant currency.
For the quarter ending 30 June 2025, Wipro expects revenue from its IT Services business segment to be in the range of $2,505 million to $2,557 million. This translates to sequential guidance of -3.5% to -1.5% in constant currency terms.
On a full-year basis, the company's consolidated net profit jumped 18.92% to Rs 13,135.4 crore in FY25, compared to Rs 11,045.2 crore in FY24. Revenue from operations declined marginally to Rs 89,088.4 crore in FY25 from Rs 89,760.3 crore in FY24.
The company said that its closing employee count in IT Services stood at 233,346. Voluntary attrition was at 15% on a trailing 12-month basis.
Srini Pallia, CEO and managing director, said, 'We closed FY25 with two mega deal wins, an increase in large deal bookings, and growth in our top accounts. Client satisfaction scores improved, reflecting strong execution and engagement. We also continued to invest in our global talent and in strengthening our consulting and AI capabilities. As clients remain cautious in the face of macroeconomic uncertainty, we're focused on partnering closely with them while staying committed to consistent and profitable growth.'
Aparna Iyer, chief financial officer, said, 'For Q4, operating margins expanded 110 basis points year on year, and for the full financial year, margins expanded by 90 basis points. Our focus on execution rigour has ensured that our margins have steadily expanded even in a softening revenue environment. Our endeavor will be to maintain the margin in a narrow band in the coming quarters. Our net income grew 6.4% sequentially in Q4 and 18.9% for the full financial year. Cash flow continued to be robust in Q4, resulting in net operating cash flow generation of almost $2 Bn for FY'25, which is 128.2% of our net income.'
Meanwhile, the company's board has declared an interim dividend of Rs 6, which was declared by the board at its meeting held on 17 January 2025 and shall be considered as the final dividend for the financial year 2024-25.
Wipro is a leading technology services and consulting company focused on building innovative solutions that address clients' most complex digital transformation needs.
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