Wipro Q2 Results: Improve Revenue Growth & Weak Deal Boookings

📊 Key Financial Highlights

Revenue: ₹24,753 crore, up 9.1% YoY and 1.1% QoQ. However, reported revenue growth does not fully reflect the underlying performance of IT services.
Net Profit: Approximately ₹3,200 crore, down 1.9% YoY and 4.7% QoQ. Revenue growth has not yet translated into stronger bottom-line growth.
IT Services Revenue: $2,611.5 million, up 0.3% YoY but down 0.1% QoQ.
Constant-Currency Growth: IT services revenue increased 0.6% YoY and remained flat sequentially. This indicates modest underlying business growth.
Operating Margin: 16.5%, improving 0.5 percentage points QoQ but declining 0.2 percentage points YoY. The sequential improvement is positive, although profitability remains under pressure compared with last year.
Earnings Per Share (EPS): ₹3.23, up 4.2% YoY and 0.9% QoQ.
Operating Cash Flow: ₹5,300 crore, up 61.3% QoQ and equivalent to 165.8% of net income. Strong cash conversion is a notable positive.
Employee Attrition: Voluntary attrition stood at 13.8% on a trailing 12-month basis.

⚠️ The Biggest Concern: Deal Bookings

Total Bookings: $2.595 billion, down 22.9% QoQ in constant-currency terms.
Large Deal Bookings: $674 million, declining 58.6% QoQ.
Weak sequential bookings could indicate slower contract conversion or delays in large client decisions.
Revenue is recognised over the life of contracts, so a fall in bookings does not immediately reduce reported revenue. However, sustained weakness may affect revenue visibility in future quarters.
Management has indicated that AI-led transformation and consulting capabilities could create new growth opportunities, but these opportunities must translate into signed contracts and revenue.

✅ Major Strengths

Revenue growth exceeded market expectations, according to Reuters' post-results report.
Operating margin improved sequentially despite continued investment in the business and workforce.
Strong operating cash flow indicates healthy cash generation relative to reported earnings.
EPS increased year-on-year despite lower net profit, offering a mixed but not uniformly negative profitability picture.
Wipro continues to win strategic engagements in AI-enabled transformation, cloud, enterprise modernisation and digital operations.
AI-related services could become a long-term growth driver if Wipro converts its capabilities and pipeline into profitable business.

🔍 Risks and Concerns

Net profit declined both YoY and QoQ.
IT services revenue was nearly flat sequentially in constant-currency terms, pointing to limited near-term organic momentum.
Weak total and large deal bookings raise questions about future revenue growth.
The company faces ongoing pricing pressure, cautious client spending and competition across the global IT services industry.
AI creates opportunities but may also increase productivity-led pricing pressure and change traditional billing models.
Management's next-quarter revenue guidance remains subdued.

📉 Q3 FY27 Outlook

Wipro expects IT services revenue between $2.571 billion and $2.625 billion.
This implies sequential constant-currency revenue growth of −1.5% to +0.5%.
The guidance suggests that near-term growth could remain flat or slightly negative.
Investors should watch whether delayed large deals convert into bookings, whether operating margins remain above 16%, and whether organic revenue growth improves.

🎯 Investor Takeaway

Positives: Better-than-expected revenue, sequential margin improvement, strong operating cash flow and continued investment in AI-led services.
Negatives: Declining net profit, near-flat sequential IT services revenue and a sharp reduction in large deal bookings.
Key monitorables: Deal conversion, organic growth, operating margins, cash-flow sustainability and the next-quarter revenue trajectory.

Overall assessmen

Wipro's Q2 FY27 results are mixed.
Revenue and cash generation are encouraging, but weak bookings and cautious guidance limit confidence in a near-term growth recovery.
A more convincing investment case would require stronger deal wins, improving organic revenue momentum and sustainable profitability.

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