Wipro's management acknowledged a mixed third quarter on Monday, with margins missing estimates due to labour code impacts and restructuring costs, even as demand commentary remained constructive. Addressing subdued Q4 guidance of 0–2%, CEO and MD Srini Pallia said the best indicator of demand was the company's pipeline, which he described as very strong, secular, and diversified across markets and sectors.

Pallia noted that the pipeline spans both large and small deals, driven largely by vendor consolidation and cost optimisation, while clarity on discretionary spending remains limited amid macro uncertainty. He added that January is typically when clients firm up budgets, which should bring more visibility on discretionary spends, particularly around AI-led projects spanning advisory, change management, security, data, and process reimagination.

On deal momentum, Pallia said Q3 bookings stood at about $3.3 billion, while year-to-date annualised bookings were around $13 billion, marking 25% growth. However, some large deals are taking longer than usual to ramp up, which has delayed revenue conversion. He said revenue acceleration depends on ramp-up of deals won over the past three quarters, fresh deal wins in the early months, and execution in Q4 — factors already baked into the company's guidance.

Explaining deal mix, Pallia outlined three segments. The first is run and support, including application support, infrastructure management, and business process services, now led with AI-first delivery through the recently launched Wipro Intelligent WINS platform. The second is software and product development, driven by AI tools under the Vega framework. The third involves business innovation and transformation, including application modernisation, AI infusion, model building, and data curation.

On the outlook for calendar year 2026, Pallia said while Wipro continues to offer quarterly guidance, technology spending remains structurally important for clients, with AI expected to drive transformation across industries. The focus, he said, remains on converting pipeline strength into deal wins and revenue.

Meanwhile, CFO Aparna Iyer highlighted that IT services margins improved sequentially to 17.6%, the company's best performance in years. She attributed this to better fixed-price profitability, optimal utilisation, AI-led efficiency gains, and rupee depreciation. Iyer said Wipro aims to sustain margins in the 17–17.5% range, even as it continues to invest for growth.

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