Wipro Q2 Preview: Revenue, Margins May Improve, But Organic Revenue Could Decline Again

Wipro is expected to report modest revenue growth and an improvement in operating margins for the September quarter, but investors are likely to focus on the IT services major's organic growth trajectory and its outlook for the December quarter amid continued demand-related challenges.

According to Bloomberg consensus estimates, Wipro's revenue is expected to rise 0.9% quarter-on-quarter to Rs 24,710 crore in the quarter under review from Rs 24,479 crore in the previous quarter. Earnings before interest and tax (Ebit) are projected to increase 4.9% to Rs 4,018 crore from Rs 3,829 crore, while the Ebit margin is expected to expand by 56 basis points to 16.26% from 15.64%.

Net profit, however, is estimated to decline 1.4% sequentially to Rs 3,306 crore from Rs 3,352 crore.

Wipro Q2 Preview

• Revenue expected to rise 0.9% at Rs 24,710 crore versus Rs 24,479 crore.
• EBIT expected to rise 4.9% at Rs 4,018 crore versus Rs 3,829 crore.
• EBIT margin expected at 16.26% versus 15.64%, up 56 bps.
• Net profit expected to decline 1.4% at Rs 3,306 crore versus Rs 3,352 crore.

Despite the expected improvement in reported revenue and margins, brokerages anticipate continued pressure on organic revenue growth, with acquisitions expected to contribute a portion of the company's overall performance. The December-quarter revenue guidance, large-deal ramp-ups and management's commentary on demand are likely to be key factors for investors.

Organic Revenue Growth Remains The Biggest Concern

Wipro is expected to report constant-currency (CC) revenue growth between a decline of 1.3% and 0.5% in Q2FY27, compared with its guidance range of a 1.5% decline to 0.5% growth. However, the estimated contribution of around 0.8 percentage points from acquisitions means that organic revenue performance could remain weak, even if reported constant-currency growth comes in within the guided range.

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The integration and ramp-up of Mindsprint and Alpha Net are expected to support inorganic growth. However, brokerages remain cautious about whether these contributions will be enough to offset client-specific headwinds, delayed deal ramp-ups and weaker discretionary spending.

Seasonality and higher furloughs are also expected to weigh on the outlook for the December quarter. Some brokerages expect Wipro to guide for another sequential revenue decline, extending the period of subdued organic growth.

What Brokerages Expect From Wipro

BofA

• Bank of America expects Wipro to report constant-currency revenue growth of around -0.4% quarter-on-quarter, with flat growth year-on-year. It estimates Ebit margin at 16.3%.
• The brokerage expects the company could guide for another quarter of sequential revenue weakness, with Q3FY27 constant-currency growth ranging from a 2% decline to broadly flat.
• The guidance will be important in assessing whether the demand environment is stabilising or whether client-specific challenges continue to delay a recovery.

Goldman Sachs

• Goldman Sachs expects Wipro to see a third consecutive quarter of organic revenue decline, forecasting a 1.5% sequential contraction in organic revenue.
• The brokerage expects reported revenue to decline 0.7% quarter-on-quarter, with around 80 basis points of inorganic contribution.
• It estimates revenue at Rs 24,800 crore, Ebit at Rs 3,940 crore and earnings per share at Rs 3.33.
• Goldman Sachs expects the Ebit margin to rise by 16 basis points sequentially to 15.9%, although it sees limited room for improvement amid pricing pressure and declining organic revenue.
• For Q3FY27, the brokerage expects revenue guidance of -1% to +1% quarter-on-quarter, including a contribution from completed acquisitions.
• It also expects client-specific headwinds to keep growth subdued.

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Jefferies

• Jefferies expects Wipro's IT services revenue to decline 1.4% quarter-on-quarter in constant-currency terms, placing performance closer to the lower end of the company's guidance range.
• The brokerage expects Q3FY27 organic revenue growth guidance of -1.5% to +0.5% quarter-on-quarter, with mega-deal ramp-ups likely to influence the trajectory.
• Jefferies expects Ebit margins to improve by 25 basis points sequentially.
• However, it believes Wipro could lag peers despite an estimated inorganic contribution of around 60 basis points.
• The brokerage will be watching the December-quarter organic growth outlook, demand conditions, deal bookings and the ramp-up schedule for large contracts.
• Management's commentary on discretionary spending and artificial intelligence (AI) adoption will also be important.

HSBC

• HSBC expects Wipro's organic constant-currency revenue to decline around 1% quarter-on-quarter, remaining within the company's guidance range.
• It forecasts a 0.6% sequential decline in US dollar revenue, including an estimated 0.75% contribution from the Alpha Net and Mindsprint acquisitions.
• The brokerage attributed the expected decline to insourcing at a key banking, financial services and insurance (BFSI) client and a delayed ramp-up of a large deal in the Americas II business.
• HSBC expects reported Ebit margin to improve by around 60 basis points sequentially, supported by operational efficiencies and favourable foreign-exchange movements.
• For Q3FY27, the brokerage expects another quarter of revenue decline, citing pressure in the technology and communications portfolio and higher furloughs.
• Investors will also look for management's timeline for a recovery in overall revenue and a path towards an Ebit margin of around 17%.

Citi

• Citi expects Wipro's constant-currency revenue to decline 0.7% quarter-on-quarter.
• It anticipates a slight improvement in IT services margins following the significant decline in the June quarter.
• The brokerage expects Q3FY27 revenue guidance of -1.5% to +0.5% quarter-on-quarter in constant-currency terms.
• Key areas to watch include the December-quarter outlook, total contract value (TCV) of deal wins and the margin trajectory.

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