Wipro Q4 Results Review— Muted Q1 FY26 Outlook; Deal Conversion Challenges Persists: IDBI Capital Retains Hold

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IDBI Capital Report

Wipro Ltd.'s revenue stood at $2,596.5 million, reflecting a subdued -1.2% QoQ / +0.8% YoY performance, impacted by macroeconomic uncertainty, lower discretionary spend and project spend going down. Management has guided for a Q1 FY26 revenue de-growth of -3.5% to -1.5%, anticipating a tepid demand recovery, albeit with cautious optimism around Europe, supported by a robust deal pipeline.

Among all verticals, EM&U performed well. BFSI witnessed a strong deal pipeline mainly on the back of Capco. Deal wins surged to $1.8 billion (+88% QoQ), though deal pipeline to deal wins and to revenue conversion remains slow.

At this moment, large deal wins to contribute to the topline with a drag of couple of quarters along with upfront cost. Management remains hopeful for a stronger H2 FY26, though seasonality may temper gains.

We anticipate a muted FY26 performance, with a modest 2% topline growth projected for FY27. Margin trajectory is likely to mirror revenue trends, given the nature of new deals largely cost take-out and vendor consolidation-led, along with AI driven engagements but with limited contribution from high-margin transformational deals.

We retain our Hold rating, revising our target price to Rs 260, valuing the stock at 20.5x FY27E EPS.

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