Wipro Q1 24/25 (Media) Earnings Report

Wipro EPS Results

• Actual EPS: $0.04
• Consensus EPS: $0.04
• Beat/Miss: Beat by +$0.00
• One Year Ago EPS: N/A

Wipro Revenue Results

• Actual Revenue: $2.58 billion
• Expected Revenue: $219.23 billion
• Beat/Miss: Missed by -$216.66 billion
• YoY Revenue Growth: N/A

Wipro Announcement Details

• Quarter: Q1 24/25 (Media)
• Date: 7/17/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, July 17, 2025
• Conference Call Time: 7:30AM ET

Wipro (NYSE:WIT) operates as an information technology (IT), consulting, and business process services company worldwide. It operates through IT Services and IT Products segments. The IT Services segment offers IT and IT-enabled services, including digital strategy advisory, customer-centric design, technology and IT consulting, custom application design, development, re-engineering and maintenance, systems integration, package implementation, cloud and infrastructure, business process, cloud, mobility and analytics, research and development, and hardware and software design services to enterprises. It serves customers in various industry sectors, such as communications, retail connectivity and services, consumer goods, healthcare, technology products and platforms, banking and financial services, energy, manufacturing and resources, capital markets and insurance, and hi-tech. The IT Products segment provides a range of third-party IT products comprising enterprise platforms, networking solutions, software and data storage products, contact center infrastructure, enterprise security, IT optimization technologies, video solutions, and end-user computing solutions. It serves enterprises in various industries primarily in the Indian market, which comprise the government, defense, IT and IT-enabled services, telecommunications, manufacturing, utilities, education, and financial services sectors. The company was incorporated in 1945 and is based in Bengaluru, India.

Wipro Q1 24/25 (Media) Earnings Call Transcript

Key Takeaways

• Negative Sentiment: IT services revenue of $2.59 billion was down 2% year-on-year in constant currency, though margins expanded 80 bps to 17.3%, and Q2 guidance calls for –1% to +1% sequential growth.
• Positive Sentiment: Bookings reached $5 billion in total contract value (up 51% YoY) and $2.7 billion in large deals (up 131% YoY), including 16 large deals with two mega-deal wins.
• Neutral Sentiment: Clients focused on cost optimization and vendor consolidation amid macro uncertainty, while accelerating AI, data and modernization programs; BFSI demand remained strong but Europe faced headwinds.
• Positive Sentiment: Wipro’s “AI-first, AI-everywhere” push saw deployment of over 200 AI-powered agents and integration of AI into industry solutions to drive productivity and new offerings.
• Positive Sentiment: Net income grew around 11% YoY, free cash flow was 115% of net income, gross cash reached $6.4 billion, and an interim dividend of ₹5 per share was declared under a 70% payout policy.

Presentation

[Nisha Chandrasekaran, Manager - External Communications at Wipro]

Welcome everyone to our Kauriti campus. For those of us who are joining virtually, good morning, good afternoon, good evening. We will begin the press conference for Wipro's first quarter earnings. My name is Nisha Chandrasekran. I'm part of the external communications team, and I will be your moderator for today.

[Nisha Chandrasekaran, Manager - External Communications at Wipro]

Joining me on stage is our chief financial officer, Aparna Ayar our chief executive officer and managing director, Srini Palia and our chief human resources officer, Saurabh Govil. We will begin with opening remarks from our CEO, followed by a financial review from our CFO. Post that, we'll open the floor for your questions. With that, let me hand over to our CEO and managing director, Srini Pallo.

[Srini Pallia, CEO & MD at Wipro]

Thank you, Lisa. We have to stop. Good evening, everyone. I'll just give it a minute of course. Again, good evening, everyone.

[Srini Pallia, CEO & MD at Wipro]

Thank you for joining us today. Let me start with a quick view on quarter one and, of course, the broader environment that we are seeing today. If you recollect, we started the quarter facing significant macro uncertainty, which kept overall demand muted. In fact, our clients prioritized initiatives with immediate impact focusing on cost optimization and vendor consolidation. And at the same time, they accelerated their AI, data, and modernization programs.

[Srini Pallia, CEO & MD at Wipro]

We saw a clear trend of many AI projects moving to scale and production. So we quickly aligned with these priorities, deepen our partnerships, and, of course, secured key deals. The large deals we closed this quarter and, of course, the last quarter, along with a strong pipeline, put us in a good position for the second half of the year. With that, let me now turn to our quarter one performance. I'll start with key financial highlights and an overview of our markets and sectors.

[Srini Pallia, CEO & MD at Wipro]

I'll request Apanna to provide further details on the financials in her remarks. Our IT services revenue for quarter one was dollar 2,590,000,000.00, which is degrowth of 2% in constant currency terms within our guidance range. Our IT services margin was 17.3%, an expansion of 80 basis points year on year. In our markets, Americas grew 1.5% year on year in constant terms, and we are seeing strong deal momentum in Americas. APM revenue stayed flat.

[Srini Pallia, CEO & MD at Wipro]

However, digital spending in India, Middle East, and Southeast Asia kept this market resilient for us. Europe continued to face headwinds, and clients remain focused on maintaining their competitiveness in this environment. Finally, Capco grew year on year driven by strong performance in Latin America. Now turning to our industry sectors. In fact, in BFSI, demand is strong and steady.

[Srini Pallia, CEO & MD at Wipro]

Clients are modernizing their IT landscape with a sharp focus on AI led efficiency and transformation. In fact, we won two mega deals here, which I will discuss later. In consumer and EMR, we are seeing a more cautious mode. Retail, CPG, and manufacturing in these sectors have been most affected by tariffs. Even though discretionary budgets are tight, outsourcing renewals are creating new opportunities for us to gain wallet share. In technology and communications, we are seeing a clear shift towards AI investments. In fact, clients are looking to innovate and future proof their software and platforms.

[Srini Pallia, CEO & MD at Wipro]

We won a large deal here, and in fact, that has the potential to become a mega deal. Health care for us continues to do well as clients invest in modernization and digital transformation. While payers are under cost pressure, the overall outlook for the sector remains positive. These priorities and shifts in client focus are evident in the strategic deals we we have won in quarter one. Let me talk about that.

[Srini Pallia, CEO & MD at Wipro]

During this quarter, we reported bookings worth dollar 5,000,000,000 in total contract value, a growth of 51% year on year. Our large deal bookings reached dollar 2,700,000,000.0, up 131% year on year. This includes 16 large deals this quarter, including the two mega deals I just talk about I talked about. Several of these wins I want to repeat several of these wins were driven by vendor consolidation where we continue to build strong momentum. These deals reflect a good balance of extension of work and securing new business.

[Srini Pallia, CEO & MD at Wipro]

They also highlight our capabilities, our domain expertise, and the progress we have made in AI. Let me share three examples to bring this to life. All three are two of them are mega deals, and one of them is potential mega deal. My first example is a global banking leader that selected us as their strategic partner to transform technology across multiple business lines and enterprise functions. They chose Wipro for our deep BFSI expertise and consulting led approach.

[Srini Pallia, CEO & MD at Wipro]

We will help transform their digital ecosystem, modernize their cloud and data platforms, and improve cyber resilience by and also embed AI across the software development life cycle to boost engineering productivity and also reimagine core processes. Next, a leading global semiconductor company signed a multiyear agreement with us to modernize its entire product life cycle. Building on our long standing partnership, we will drive end to end engineering transformation from silicon design and system software to platform development and hardware validation. Our focus is on using AI and automation to accelerate development, improve quality, reduce costs, and enable agile practices. The third one, we secured a mega deal with a leading North American bank extending a decade long partnership. We will transform their technology across core banking, wealth management, and retail using our AI powered global delivery framework.

[Srini Pallia, CEO & MD at Wipro]

In fact, this includes modernizing the cloud infrastructure, strengthening cyber resilience, and digital ecosystems and enterprise applications. For client, this will accelerate innovation, improve time to market, and deliver a customer centric experience. If I notice, these examples highlight a clear trend. AI is no longer a niche. It's becoming essential to how business businesses operate at scale.

[Srini Pallia, CEO & MD at Wipro]

At Wipro, we see AI as a force reshaping industries and amplifying human potential. We are, in fact, building an AI first AI everywhere enterprise focused on solving complex challenges, accelerating delivery, and reimagining operations at scale. By embracing autonomous and agentic AI, we are transforming business models and how organizations work. Our AI capabilities are integrated into both industry and cross industry solutions. So by combining domain expertise with AI, we are able to deliver value through solutions such as hyper personalized wealth management for our BFSS clients, predictive industrial insights for our manufacturing clients.

[Srini Pallia, CEO & MD at Wipro]

So far, we have deployed over 200 AI powered agents using advanced technologies from our leading hyperscalers who are big partners. Just to give an example, these agents enable smarter lending, intelligent claims processing, and autonomous network management. I talked about teams and talent. We are equally focused on talent and training our teams with the skills and mindset to thrive in an AI first world. Building on this strong foundation and with our continued focus on five strategic priorities, we are well positioned for the future.

[Srini Pallia, CEO & MD at Wipro]

I'd like to now discuss our outlook for the next quarter. While we are cautious given the macro environment, our strong order book, healthy pipeline, and focus on AI powered consulting led solutions give us confidence in delivering long term value to our clients. Returning to profitable growth remains our priority. Based on our visibility, we are guiding for a sequential growth of minus 1% to plus 1% in constant currency terms. With that, let me hand over to Apana for a detailed view on our financials. Thank you, and over to you, Apana.

[Aparna Iyer, CFO at Wipro]

Thank you, Srini. Good evening, ladies and gentlemen. Let me give you a brief update on the financial performance for the quarter ended thirtieth June twenty twenty five before we move on to the Q and A session. Our IT services revenue for quarter one sequentially declined by 2% in constant currency terms, which is within our guidance range. On a year on year basis, the revenues declined by 2.3% in constant currency terms.

[Aparna Iyer, CFO at Wipro]

Our operating margins for quarter one was at 17.3%. This is an expansion of 80 basis points on a year on year basis. As Srini shared, many of our large deal wins are in the nature of cost takeout or vendor consolidation. These deals require upfront investments and come with their fair share of pressures on cost. As always, we will continue to focus on operational excellence in order to offset these pressures.

[Aparna Iyer, CFO at Wipro]

Let me give you some color on the performance of our strategic market units and sectors. All numbers that I will share will be on constant currency basis. Americas 1 grew point 2% sequentially and grew 5.8% on a year on year basis. Americas 2, they grew 1.7% sequentially and 2.7% on a year on year basis. Europe declined 6.4 sequentially and 11.6% on a year on year basis.

[Aparna Iyer, CFO at Wipro]

Apnea has grown point 6% sequentially and has declined point 1% on a year on year basis. Moving on to sector performance. BFSI declined 3.8% sequentially and 3.5% year on year. Health care grew half a percent sequentially and 3.5% on a year on year basis. Consumer declined 4% sequentially and 5% year on year.

[Aparna Iyer, CFO at Wipro]

Teleco technology and communications grew point 4% sequentially and declined point 3% on a year on year basis. Energy, manufacturing, and resources declined 0.7% sequentially and 2.4% on year on year. Capco continued to perform well, growing 6.1% on a year on year basis. Let me share with you some of the other key financial parameters. Our net income grew 10.9% year on year in Q1.

[Aparna Iyer, CFO at Wipro]

This is after absorbing a one time restructuring charge of INR247 crores. Our EPS for the quarter was at INR3.2, a growth of 10.8% year on year. The free cash flows as a percentage of net income continues to be robust and came in at 115% for the quarter. This takes our gross cash, including investments, to $6,400,000,000 In Q1, our net income grew 62% on a year on year basis. Accounting yield for the, average investments held in India was at 8.1% in the quarter.

[Aparna Iyer, CFO at Wipro]

Our effective tax rate was 21.6% for q one twenty six versus 24.5% in q one twenty five. Our hedges continue to be in line with policy. We had about 2 and a half billion dollars of Forex derivative contracts as hedges at the end of the quarter. Finally, before I move to guidance, I would like to share with you that our in our recently concluded board meeting, the board of directors have declared an interim dividend of rupees 5 per share. With this, we have now distributed excess we have now distributed cash in excess of 1,300,000,000.0 in the last six months.

[Aparna Iyer, CFO at Wipro]

As you know, we have revised our capital allocation policy in January to pay out to a minimum of 70% of our net income over a block of three years. Going forward, subject to our cash position, the need for strategic investments, and board approval, our endeavor will be to pay dividends twice a year, once along with the June results and then along with the quarter three results. In terms of guidance, to reiterate what was shared by Srini, we expect revenues from our IT services business segment to be in the range of $2,560,000,000 to $2,612,000,000. This translates to a sequential guidance of minus 1% to a plus 1% in constant currency terms. With that, I'm gonna hand this over to Nisha, and we'll open it up for q and a.

[Nisha Chandrasekaran, Manager - External Communications at Wipro]

Thank you, Aparna. We will now open the floor for your questions. For journalists present in the room, please raise your hand for the mic, and we will pass it to you. For the journalists outside of Bangalore who have joined us on Teams, please key in your questions, and we'll accommodate as many as we can. To ensure that everyone has a chance, we request that you keep your questions to two, and please introduce yourself before your publication and your publication before you ask your question.

[Nisha Chandrasekaran, Manager - External Communications at Wipro]

Dina, do you wanna get oh, sorry. Sai, go ahead.

[Sai Ishwarbharath B, India Company News Correspondent at Reuters]

Hi. This is Sai Ishwar from Reuters News. So two questions. Srini, so what is the macro outlook right now? You said in your speech that you are cautious about the coming quarter, but still the deal wins give you, you know, some visibility.

[Sai Ishwarbharath B, India Company News Correspondent at Reuters]

But beyond that, has the situation changed from what we see what you had seen in the start of q one? And one to Aparna, So we see that Americas has grown by 5.8% constant currency. But if you see the sectors, all the sectors are are down. So what has, you know, powered this America's one performance? And just one more if I can squeeze in.

[Sai Ishwarbharath B, India Company News Correspondent at Reuters]

So, Srini, you have completed one year. Congratulations. And I I think in corporate parlance, you are eligible for hikes now. So any additional mandate from the board now since you've, you know, completed a year? Or any personally, also, any change in additional goalposts or additional vision here since you've completed a year? Thank you.

[Srini Pallia, CEO & MD at Wipro]

No. I completed one year last quarter. So, you know, one quarter, little too late to ask me that question.

[Sai Ishwarbharath B, India Company News Correspondent at Reuters]

Delay in hikes question.

[Srini Pallia, CEO & MD at Wipro]

So he's asking about hiking. Okay. Yeah. You know, first and foremost, I think most important thing is to stay focused on the clients and continue to deliver on our five strategic priorities. So from that perspective, I think, you know, we'll continue to stay focused.

[Srini Pallia, CEO & MD at Wipro]

Going back to your question on macro environment, I would certainly say that I would certainly say that there is uncertainty. Okay? So the whole aspect of geopolitics continues. The aspect of tariff continues. And each of the industries and each of the countries have a different situation, but at a broadly from a sector perspective, clearly, like I said, retail CPG and manufacturing are the three industries specifically impacted by that.

[Srini Pallia, CEO & MD at Wipro]

But if you look at, like I said, BFSI, right, it's very the pipeline is very strong and also deal momentum and wins are also strong for us. The clients are very focused on cost optimization and vendor consolidation. I think that's where we are winning. Having said that, the clients are also spending money on AI data, and that's where, you know, we are also staying focused on. In terms of technology and telecom, clearly, you know, they want to protect their investments, both software and platforms.

[Srini Pallia, CEO & MD at Wipro]

Again, a lot of investments in AI. So net net, uncertainty continues. Yeah.

[Aparna Iyer, CFO at Wipro]

So your question on Americas One Group, we're very pleased with our performance. We've been growing 5.8% year on year. If you notice our performance in Americas One has been strong all through. Sectors that are doing well within the market unit, health is doing really well, and that continues to grow for us and is one of the sectors that's actually powering the growth for the market unit. We had a very good win in communications vertical in q one of last year that continues to grow and build into a very good, sector for us within the market unit.

[Aparna Iyer, CFO at Wipro]

Consumer, even though this quarter there is slight softness because of, you know, tariff related impacts, is something that has done really well in terms of, the p two c part of tech technology companies. We kind of categorize them as consumers. So that part of consumer is doing really well even though there was some softness in retail and CPG. But, overall, if you look at our bookings in retail and CPG this quarter, those bookings have come in really well. Right?

[Aparna Iyer, CFO at Wipro]

So six of the, you know, large deals that we spoke of, 16 large deals are actually in consumer. So we do feel very confident about our performance in Americas, one. I would say that it's very broad based within the industry verticals that are up there within that unit. Yeah.

[Beena Parmar, Assistant Editor at The Economic Times]

Hi. This is Bina from The Economic Times. Srini, you mentioned that, you know, most of your, deals have been in vendor consolidation and cost takeout. Could you give us a sense if discretionary demand is no more, know, the focus and is this an era of past for most of the companies? And you mentioned about pressure on cost as well.

[Beena Parmar, Assistant Editor at The Economic Times]

Do you see that really impacting the margins going forward? And are you seeing a revisit in terms of your pricing overall on deals across the industry, if you could just highlight? Second, in terms of AI efficiencies, how is that impacting your hiring and, headcount change? Because this quarter as well, we've seen very, minimal, you know, changes. And if that is going to continue and the nonlinearity between revenue and, headcount changes likely to be the new normal.

[Beena Parmar, Assistant Editor at The Economic Times]

And also in addition, similar to that, you mentioned yesterday in your AGM that there is a focus on getting high potential talent and, you know, moving high performers to critical roles. Could you elaborate a little bit on what is your game plan going forward?

[Srini Pallia, CEO & MD at Wipro]

Hi, Vina. So discretionary spend is coming back in certain pockets. It's not uniform across. Second, when I said, you know, we are focused on data, AI, and modernization, that's kind of a discretionary spend because, you know, this is something that clients wants to experiment on. So if you look at the cost optimization and vendor consolidation, the savings that a client can get actually gets into a discretionary spend.

[Srini Pallia, CEO & MD at Wipro]

So so these are the two tracks that we are seeing as far as we are concerned. This is purely based on the pipeline that we see. So there will continue to be investment on data, AI, and modernization in a big way going forward. And, of course, there'll be projects around, you know, cybersecurity and, you know, enterprise modernization and so on and forth. As far as AI efficiency is concerned, I think, you know, it continues to evolve.

[Srini Pallia, CEO & MD at Wipro]

Right? For example, I gave ex you know, I said the you know, we have built 200 agents that we have put on the hyperscalers. These agents actually address certain tasks. Right? So we are building on that.

[Srini Pallia, CEO & MD at Wipro]

As far as talent that we we have, whether it's a software development or managed services or building our industry solutions and, you know, our platforms and agents, we need their talent. However, they have to be AI trained. No. They have to be, know, trained in advanced AI, and that's how I see at this point in time. There is no strong correlation in the industry yet in terms of AI and and, you know, the hiring aspect of it.

[Srini Pallia, CEO & MD at Wipro]

I think, you know, it'll continue to evolve as we move forward. As far as high of no. High performance, you want to talk about it, sir? Or

[Saurabh Govil, Chief Human Resources Officer at Wipro]

In the philosophy across, and I think Srini actually reiterated it to the AGM. We continue to have people taking up critical roles who are high potential, and we have a main strength. And you're seeing it across since last one and a half years, Srini has come. A lot of critical roles people have moved up and taken up those roles. So that'll be in a philosophy for us, and we'll continue to build on it.

[Srini Pallia, CEO & MD at Wipro]

So so, Vinay, just to add one more. Right? It's also important for our, you know, our leaders to rotate laterally, and I'm a classic example at Wipro for the last three decades. I've done multiple roles, and that gives you a good view of clients and within Wipro and and the partnership. So that's that's going to be evolving, and that's how you build future ready leadership for Wipro.

[Saurabh Govil, Chief Human Resources Officer at Wipro]

Yeah. Impact and pricing of deals.

[Srini Pallia, CEO & MD at Wipro]

So if you look at a a a software development life cycle, let's talk about it. You know, it depends upon the tool that you use and the productivity the tool can get in coding stage, in testing stage, and in the deployment stage. So the pricing will actually put those components into it when you are actually going back to the client. So it will be, you know, part of the project cost, you know, end to end project cost.

[Nisha Chandrasekaran, Manager - External Communications at Wipro]

Veena, you'd like to go next?

[Veena Mani, Special digital content specialist at The Times Of India]

Yeah. Hi. Veena Mani from the Times of India. First of all, I wanted to understand the you know, we keep talking about benefits of AI being passed on to the customer. What kind of benefits are we talking about at this point?

[Veena Mani, Special digital content specialist at The Times Of India]

And how is it, you know, panning out in terms of the projects that you're getting? Are you getting more projects for the same price that you're, offering? Or are they asking you to, take a discount and keep the scope of work the same? Aparna, if you could give the margin breakup for the quarter, you know. And then from the talent perspective, AI talent is quite premier, you know, quite niche in the industry still.

[Veena Mani, Special digital content specialist at The Times Of India]

What I gather from industry is about only 20 to 30% people are really ready to take on AI roles. Is that having an impact on the on the salaries that you're giving people that you hire for AI? Is there a premium involved here? The same way that, you know, that happened in the cloud cycle, you know, people with cloud skills got more. Also, if I look at the fact sheet, there's been a if I look at the attrition right from '24 till now, there's been a steady increase.

[Veena Mani, Special digital content specialist at The Times Of India]

Now where are we heading? Are we going back to a cycle of high attrition, increasing attrition, and is there a reason for that?

[Saurabh Govil, Chief Human Resources Officer at Wipro]

Sure. All questions for you. Should I start?

[Aparna Iyer, CFO at Wipro]

Yeah. Go ahead, sir. Go ahead.

[Saurabh Govil, Chief Human Resources Officer at Wipro]

So first of all, on attrition, if you look at an aggregate last four quarters, it's been, you know, as my colleague and friend, Aparna, says narrow band of one point point one point two, and also 15. It's the path. We see as we move forward the attrition coming down. That is one. However, we also see that there are pockets where we are seeing higher attrition depending on the skill and the demand for that skill.

[Saurabh Govil, Chief Human Resources Officer at Wipro]

But from our standpoint, we are very comfortable with this kind of a range of attrition forwards. That is one. But we have good supply and, you know, good bench and, you know, there is no challenge in meeting demand. On the talent and premiumness, I think that's been a norm and industry norm for us for the last three decades. As new technology comes in, we have always seen this thing happen.

[Saurabh Govil, Chief Human Resources Officer at Wipro]

We always have a role at building that that capability and going to get that capability, and it's been a mix. It's not that there are large number of people available in the industry who are deeply trained on AI. That's also a very new area. So, obviously, that's the scarcity, and that's why there's a premium. But we are comfortable because we are doing a lot of work in house to build that talent as well.

[Saurabh Govil, Chief Human Resources Officer at Wipro]

So it's a combination, and we we have gone through these cycles earlier also. Know, the ERP, there was data, there was cloud. So it's it's going on. So same way we are at understood it. So on both these counts, we're fairly comfortable as we move move forward.

[Aparna Iyer, CFO at Wipro]

You had a question on margins, Hila. You you were requesting for a breakup. I'm assuming you're looking for a margin walk, right, of sorts. It's been a narrowband. We we reported 17.5% last quarter.

[Aparna Iyer, CFO at Wipro]

We we q one, we delivered 17.3, so that's a 20 basis points moment. If you look at Forex, it's been broadly flattish. Our utilization has been flattish. We've had some savings in SG and A, and, you know, we've had, you know, the revenue decline being offset through operational improvements. That's broadly how I would characterize the margins for the quarter.

[Aparna Iyer, CFO at Wipro]

You also had a question on AI and how that's been, like, impacting deals and pricing. See, you know, like I said, Srini had spoken about how a lot of the deals that we won are vendor consolidation cost takeout. Right? Now these deals will have a fair share of AI, right, in terms of productivity that we bake in, and some of those benefits are passed on to the client. Right?

[Aparna Iyer, CFO at Wipro]

And therefore, we you know, in some sense, it has always been the case with the industry, right, that vendor consolidation deals are very intensely fought and competed, and therefore, it's always likely to be accommodated. But if you look at overall portfolio of the deals that you win and the pricing that you get, it's pretty much neutral and same similar. But this category of deals, there is more pressure. Right? And there is a tendency to be a little bit more competitive and for you to take on more than, you know, what you can see at the moment, and therefore push yourselves to it.

[Aparna Iyer, CFO at Wipro]

So that's about it. If if there's something else that you wanna add?

[Saurabh Govil, Chief Human Resources Officer at Wipro]

Perfect.

[Nisha Chandrasekaran, Manager - External Communications at Wipro]

Can we have the next question for Puneet?

[Puneet Javeri, Senior Research Analyst at NDTV Profit]

From NDTV profit, thanks Sorry.

[Srini Pallia, CEO & MD at Wipro]

Missed your name. Puneet. Puneet.

[Aparna Iyer, CFO at Wipro]

Puneet.

[Puneet Javeri, Senior Research Analyst at NDTV Profit]

Thanks for the opportunity. Just a couple of questions on deal wins has been very strong in an uncertain time as you pointed out. How do you see the movement of these deal wins into your financials? Because we've seen that kind of impact on both revenue as well as margins for the last two quarters, and the margins have been a little more stark compared to the previous quarter. So if you can just give some perspective on how do these big deal wins 16 largely as you quantified into financials?

[Puneet Javeri, Senior Research Analyst at NDTV Profit]

And the second is largely on guidance. You mentioned for quarter two, minus one to plus one percentage point. Does that largely put pressure on the second half to post any kind of positive revenue growth for this year? Because it's something that's been conversation with Wipro. So how do you tackle that as well going into h two?

[Puneet Javeri, Senior Research Analyst at NDTV Profit]

I know we're still in quarter one, but how does that happen in h two for growth in terms of revenue? That's it. Thank you.

[Aparna Iyer, CFO at Wipro]

So, you know, in terms of deal wins and conversions, some of the deals that we won have, you know, a good balance of both extending the work that we do, and then there is an element of expansion. Given the nature of these deals, they will take about, six to eight quarters for them to just fully ramp up. Right? But you will start seeing that trickling down. And we also had a very large deal win in q four of the last fiscal, right, the Phoenix deal win.

[Aparna Iyer, CFO at Wipro]

So this does put us collectively in a better shape, and, you know, Srini also characterized that in his speech by saying that the second half is looking far more positive, and we've got the deals that we need. Now it's down to execution. Your point on guidance for quarter two, at midpoint, it's flat. We we always guide based on the visibility that we have at the start of the quarter. We don't give a few full year guidance, but just based on the deal bookings, we've already given you a color that, you know, the performance would get better in the second half. Rishi, we can go.

[Reshab Shaw, Senior Correspondent at moneycontrol]

Yeah. Hi. Hi, Srini. Apanna and Saurabh. Rishi, we are from MoneyControl.

[Reshab Shaw, Senior Correspondent at moneycontrol]

So, Srini, you know, your large deal wins are at least 19 quarter high, but the cease you know, constant currency revenue growth is at eight quarter low. So is there a delay in conversion if you could throw more light on that? You know? Then you have a stated goal that to you'll reduce reduce your tail end of your customers. So how is that rain trend playing out?

[Reshab Shaw, Senior Correspondent at moneycontrol]

Because we see that there's a continuous reduction in the, you know, number of clients that you have. Are you losing market share there? And, you know, are you building LLMs, SLMs for banks because that's gaining traction and momentum? Thank you.

[Srini Pallia, CEO & MD at Wipro]

So hi, Rishab. Let me answer the one and three, and then I'll leave the deal accounts to you on the on the large deal wins. Right? If you recollect in quarter four, we announced a lot an omega deal, which is from Phoenix. Right?

[Srini Pallia, CEO & MD at Wipro]

And that actually will get started in quarter three. So some of these large deals do take time for the ramp up. Similarly, the deals that we have won this quarter, right, sorry, last quarter, will take some time for us to, you know, for it to accelerate. As those, you know, deals we've complete the transition get you to a steady state, it'll have a impact on the revenues in a positive way. So I'll leave it there.

[Srini Pallia, CEO & MD at Wipro]

And I know I think, like you rightly said, a very strong deal wins, both a $5,000,000,000 overall deal wins and two points and $5,000,000,000 of large deal wins. I think one of the highest, you know, like you rightly said. Coming to the LLMs and SLMs, I think our strategy for our clients is we have what we call as a AI the pro AI platform, and we have Vega Studio. And the platform is a place where we have the complete guardrails to make sure whatever we build in the context of AI is ethical, is secure, is reliable, and responsible. With that in the context, what we do for our clients is use the LLMs that are there in the market.

[Srini Pallia, CEO & MD at Wipro]

We don't build LLMs, but we build SLFs. We build that models. We feed in the data and, you know, actually help our clients to accelerate on the AI journey.

[Aparna Iyer, CFO at Wipro]

Hi. So the point on clients. Right? Number of clients. If you look at the number of clients with more than $50,000,000 of revenues, it's actually expanded from 44 to 47.

[Aparna Iyer, CFO at Wipro]

If you look at our our top account, top five, and top 10, they're all growing. In fact, substantial portion of the large deal bookings that we've got is actually from our top 10 existing clients. So in fact, we are doing very well. And the fact that we are winning in vendor consolidation should give you you should all take heart that, you know, it's it will continue to grow. Right?

[Aparna Iyer, CFO at Wipro]

You know, and we continue to add about 49 clients. The drop that you see is just a result of discretionary spends being weak, which continues to play on it. But I would urge you to look at how our top client performance is, and that will continue to do well. Go ahead. Okay.

[Uma Kannan, Journalist at The New Indian Express]

Good evening. I'm Uma Khanan from the New Indian Express. How your acquired companies have contributed your growth in Q1? You did speak about, you know, Capco, I think, 6%. So how growth would be for these, acquired companies in coming quarters, first?

[Uma Kannan, Journalist at The New Indian Express]

And second, Apanna, last time you spoke about headwinds on account of an uncertain macroeconomic environment and that it is putting pressure on your, revenues. So are there any signs of change that you're seeing in the second half?

[Aparna Iyer, CFO at Wipro]

So on the acquired entity performance, think Capco has done well. We have shared that it has grown 6% on a year on year basis. If you look at the last twelve months bookings of Capco, it's very robust. We've had a billion dollar plus booking. So Capco will continue to grow, and, you know, we we see good momentum in that business.

[Aparna Iyer, CFO at Wipro]

In terms of other acquired entities, you know, there's been some softness in how the s four SAP programs. There have been some pauses deferral owing to the diff, you know, tariffs, etcetera. But overall, we do think that, you know, it it should stabilize in the coming quarters. Right? What was your second question?

[Uma Kannan, Journalist at The New Indian Express]

That's it.

[Aparna Iyer, CFO at Wipro]

On revenues, I just spoke we just spoke about it. A lot of the large deal wins that we've had over the last six months gives us confidence. Right? And, last time when we met, there was macroeconomic uncertainties and we guided minus 3.5 to minus 1.5, and we shared that, listen, that's based on the visibility we have and if things were to improve because there was substantial flux in the first fifteen days of April, it has improved. And therefore, it's also reflected in the way our quarter one performance has been it's coming between the midpoint and the top end of our guidance range.

[Aparna Iyer, CFO at Wipro]

So there has been some improvement. Our Q2 guidance also reflects it and our commentary that the second half will look better is also based on our own bookings that we've had.

[Nisha Chandrasekaran, Manager - External Communications at Wipro]

Avik, would you like to go next? Yeah.

[Avik Das, Associate Editor at Business Standard]

Sure. Hi. Avik Das from Business Standard. Srini, couple of questions. You talked about having a very strong deal momentum in America.

[Avik Das, Associate Editor at Business Standard]

So would you be able to give me some breakup in which are some of the specific verticals that you are seeing that growth momentum headed? And you also talked about the European headwinds. What are some of those headwinds? Is it client specific or is it geography specific? Because some of your peers, of course, have been just having it the other way.

[Avik Das, Associate Editor at Business Standard]

Apanna, also on the questions on margins, 17.3, it's you're closing towards the, you know, the upper end of your band. Now going ahead, would margins be under pressure or would you be able to maintain those numbers? If you can just clarify. And, Saurabh, I also wanted to know that attrition has been going up in the industry over the last twelve months. So what are some of the specific reasons for that?

[Avik Das, Associate Editor at Business Standard]

It's not company specific. It's industry happening across the industry, so I wanted to get your views. And again, I'll repeat the question that I also asked in April. Are the hikes happening in October? And if that is so up or now, would margins again be a little bit constrained?

[Srini Pallia, CEO & MD at Wipro]

It's a second that concept query. I do.

[Aparna Iyer, CFO at Wipro]

I should start with Saurabh.

[Srini Pallia, CEO & MD at Wipro]

Go ahead.

[Aparna Iyer, CFO at Wipro]

And then me and the

[Saurabh Govil, Chief Human Resources Officer at Wipro]

On the fights, we haven't decided. It's too early. The macro environment, the current demand, supply, all this will play in factors. I do not speak what's what are we seeing within the industry right now. But through the date, we'll take a call and communicate.

[Saurabh Govil, Chief Human Resources Officer at Wipro]

So I think that's where we're on the margin front. On the attrition, if you look at it, and then twice it's come up, let me just call all the numbers. It's been last three quarters if you look at between fifteen, fifteen, 15.1. So it's not that it is something we may do. Yeah.

[Saurabh Govil, Chief Human Resources Officer at Wipro]

But it's been flattish kind of a thing. There are pockets, as I said. There are skills which are in demand. There is DCC hiring which is in demand. There are some startup hiring that's in demand.

[Saurabh Govil, Chief Human Resources Officer at Wipro]

So there are different pockets where we're seeing things that are happening. And, ultimately, it's people with the right skill and expertise that work who are going on. So I think that's where we are. But we are continuing everything. You know?

[Saurabh Govil, Chief Human Resources Officer at Wipro]

If you look at our people standpoint, we are going to our campuses and hiring. We we are hiring across the globe depending on demand, which is coming. And and in a tough environment, we continue to be flattish on the headcount. So I don't see that as a challenge at at all from a supply side to manage the demand coming from.

[Srini Pallia, CEO & MD at Wipro]

So you want to take?

[Aparna Iyer, CFO at Wipro]

No. You go ahead, Amir.

[Srini Pallia, CEO & MD at Wipro]

So, Avik, on the deal momentum. Right? If you look at our pipeline right now, it's very strong. We have a very strong pipeline in Americas. We have a very strong pipeline in Europe. We do have a strong pipeline up here. Right?

[Srini Pallia, CEO & MD at Wipro]

And if we look at the from a sector's perspective, like I said in my remarks as well, BFSI is strong and steady. If you look at the telecom and communications, the deals momentum continues for us. Right? If you look at the EMR, manufacturing is soft at this point in time. If you look at consumer, while the the the revenue has not been good for us at this in this quarter, but upon alluded to the fact that we have won deals in in that sector, which is specifically around b two c and b c momentum.

[Srini Pallia, CEO & MD at Wipro]

Health care continues to be good, you know, continues to create that momentum. All I all I can tell you is that in spite of booking $5,000,000,000, pipeline is still strong and it continues to be. And we're being very proactive with our clients in these conversations and will continue to do so. And the pipeline, again, discretionary spend is, you in the pockets, but it's around data AI modernization to be very specific. Cost optimization, vendor consolidation continues, and, you know, we have made a good momentum on that.

[Srini Pallia, CEO & MD at Wipro]

And the third one, which is also very important, is the industry solutions that we are building, which are consulting led AI forward, whether it's a wealth management or peers and so on and so forth, momentum continues. In fact, in health care, we had good momentum on those solutions as well. So net net, it's overall positive as far as the deal wins and deal pipeline is concerned.

[Aparna Iyer, CFO at Wipro]

So we're very excited about the $5,000,000,000 bookings, and one of the priority or focus areas for us is going to be conversion. Right? These large deals will need certain upfront investments for us to be able to convert them, and that's going to be number one priority for us. So in some sense, there are going to be pressures on our margins as we look at it, but we are very excited about the potential of growth that these deals bring with them. We've been happy with our performance on margins over the last eight quarters.

[Aparna Iyer, CFO at Wipro]

We've consistently improved and we will continue with the same rigor for us to be able to offset these pressures, but that's how we characterize and we don't guide for margins. Sorry. We could we come back to your question?

[Nisha Chandrasekaran, Manager - External Communications at Wipro]

Let's take, Sanjana. Since we're running out of time, I'd like to

[Sanjana B, Business Reporter at The Hindu BusinessLine]

Thank you. Hi. Sanjana from Business Line. Many top US banks have commented that they've reformed, you know, activities and digitization efforts, but I think there has still been some softness in this vertical for you. Any idea when there will be a recovery? And, also,

[Sanjana B, Business Reporter at The Hindu BusinessLine]

I think there's been a lot of discussion about macroeconomic uncertainties persisting. Any idea when this will simmer down? Will this continue for the remainder of this fiscal? And, Apurna, you mentioned that, performance in h two will be better. Is this despite the usual seasonalities and the furloughs?

[Sanjana B, Business Reporter at The Hindu BusinessLine]

And coming back to the first question, do you think that discretionary spending picking up will be on the back of BFSI growth? Yeah. That's it.

[Srini Pallia, CEO & MD at Wipro]

So, Santina, as far as the macroeconomics are concerned, I'm very certain that there is uncertainty. So beyond that, I don't think, you know, I can comment on that. And I think, you know, you know it. You'll you I'm sure you're, you know, reading all the reports that's coming in. So we will continue with that.

[Srini Pallia, CEO & MD at Wipro]

But I think the clients are getting to be resilient in the context of uncertainty. I think that's very important. So the the fact that you asked about BFSI very specifically. So if you look at one of the lead indicators for us is Capco. Like, Apana talked about it.

[Srini Pallia, CEO & MD at Wipro]

We grew 6% year on year in a very uncertain environment, especially in the BFSI segment. Second, if you look at the deal wins, we won two mega deals in this quarter in BFSI segment. So that also tells tells a story. Right? As far as the investments that, you know, the the BFSS clients while they're you know, they they there are uncertainties in the environment, the technology investment continues.

[Srini Pallia, CEO & MD at Wipro]

Right? What they want to do is bring in better experience, bring in velocity, and, of course, productivity into their, you know, business operations. And that that is a journey I think they will continue to do at this point in time.

[Nisha Chandrasekaran, Manager - External Communications at Wipro]

Sorry. She she has the mic. I'll just we'll ask Ayanti, and then we'll come back to you.

[Ayanti Bera, Senior Correspondent at Financial Express (India)]

Right? Ayanti, do you wanna go ahead? Yes. Hi. Ayanti from Financial Express. I have a question for Saurabh.

[Aparna Iyer, CFO at Wipro]

We can't hear you. We've been out of place. The mic a little bit closer.

[Ayanti Bera, Senior Correspondent at Financial Express (India)]

Hi. Can you hear me now?

[Saurabh Govil, Chief Human Resources Officer at Wipro]

Yes.

[Aparna Iyer, CFO at Wipro]

Yeah. Yeah. Much better.

[Ayanti Bera, Senior Correspondent at Financial Express (India)]

Hi. Ayanti from Financial Express. I have a question on or what is the increasing DOP percentage sequentially signify? Like, how do I read into that? And, also, does your hiring outlook for FY '26 is on track? I think it was around 10 to 12,000

[Aparna Iyer, CFO at Wipro]

attrition of DOP.

[Saurabh Govil, Chief Human Resources Officer at Wipro]

Attrition. So nothing so it's more seasonal and more account specific, you know, so the quarterly, so there's nothing to see much more in the DOP number that you are seeing. But, overall, our hiring, as I said, is very, demands. Today, we have, a good bench. Our utilization, while for the quarter has gone up, for a year on year basis, it's come down, so we have had space to become better.

[Saurabh Govil, Chief Human Resources Officer at Wipro]

We are getting ourselves for the bookings which we have done and to deploy people and get revenues there. And basis the demand environment and the macro environment, we'll continue to hire. We continue to go on campuses. Numbers are small. We we are still entering to after a 10,000 people addition last last fiscal event this quarter as well, and we'll continue to do so every quarter going forward.

[Saurabh Govil, Chief Human Resources Officer at Wipro]

So it'll be very demand specific from a hiring standpoint. And as to again come back on the attrition, there's nothing which is unique about DOB. It's just a quarter issue.

[Aparna Iyer, CFO at Wipro]

Narkeh, sorry

[Saurabh Govil, Chief Human Resources Officer at Wipro]

to hear.

[Aparna Iyer, CFO at Wipro]

So

[B D Narayankar, Journalist at United News of India]

I'm Narankar from United News of India. I have couple of questions. This operating margins expanded 80 bps year on year despite revenue decline. What specific level helped to preserve profitability? And Wipro reported a strong operating cash flow of one twenty three point two percent of net income.

[B D Narayankar, Journalist at United News of India]

Can we expect this trend to continue through f y twenty six? And my last question, if you can allow me, Wipro returned over $1,300,000,000 to shareholders in the last six months. And how do you balance aggressive capital returns with ongoing investments in AI and innovation.

[Saurabh Govil, Chief Human Resources Officer at Wipro]

All for you, Prashant.

[Aparna Iyer, CFO at Wipro]

Thank you. So your question on how we've improved operating margins in a weak revenue environment, it's largely owing to the operational excellence that we've been driving. If you look at it, we have been driving improved productivity in our fixed price programs. We've improved profitability in our acquired entities. We continue to remain focused on optimizing overheads, including parts of g and a that we think, you know, we can rationalize.

[Aparna Iyer, CFO at Wipro]

We have been aggressively pursuing some of that. There is also an element of forex that's also there with the rupee depreciating against the dollar that always helps in the margin performance. I think all of that has played out into our operating margins, and we will continue to those levers, we will continue to flex especially on fixed price programs led by improved productivity now, you know, especially with the focus on AI. As far as your second question is concerned on operating cash flows, we've been very pleased with our performance. Over the last two years, we've actually delivered a free cash flow as a percentage of net income far superior.

[Aparna Iyer, CFO at Wipro]

I think it was around 140% plus a couple of years back. Last year was, you know, a 120% of net income. So this quarter, again, 115% of our net income has got converted to cash. This is again on the back of, better working capital management that we've been driving. And, how do we look at it from a go forward standpoint?

[Aparna Iyer, CFO at Wipro]

Our endeavor would be to at least deliver you know, convert whatever we deliver as profits into cash. That is the minimum as a standard that we would look at. And if we can continue to do better, we will. So that's the way we look at it. On $1,300,000,000 of capital allocation, we've just announced it, I and a half 5 rupees.

[Aparna Iyer, CFO at Wipro]

It's not yet paid out. So once we pay that out, it'll become $1,300,000,000 of cash back to shareholders. This is not aggressive. In some sense, 70% of the net income cumulatively over three years. That gives us substantial flexibility for us to meet that capital allocation, and we're very comfortable with it.

[Aparna Iyer, CFO at Wipro]

And like I shared with you, we have $6,200,000,000 of gross cash on the balance sheet, enough for all organic and inorganic investments that we would like to pursue.

[Nisha Chandrasekaran, Manager - External Communications at Wipro]

We have time for one last question. Yeah. Bala, please go ahead.

[C P Balasubramanyam, Senior Tech Journalist at Analytics India Magazine]

Bala from Analytics India Magazine. I just wanted to understand if we're probably looking at any deeper partnerships with if you are looking at any deeper partnerships with OpenAI and the likes and if you are planning to planning any acquisitions to better your AI solutions. The second one is is there any specific targets to hire freshers for the year?

[Srini Pallia, CEO & MD at Wipro]

Sure. For us, m and a and partnership is strategic. As far as m and a is concerned, we look for opportunities that can give us capabilities new capabilities that can give us access to new markets that has, you know, gives access to clients. So that's something that we constantly look for. And if it is something that's a right fit for Wipro, I think we'll go ahead for that.

[Srini Pallia, CEO & MD at Wipro]

And that's a part, and that's a journey that we'll continue to be in. As far as the partnership is concerned, alright, I don't want to call out one single name, but partnership is very, very critical. And that's why we called out Wipro Innovation Network. As part of that, we've got the PartnersLab, Academia, Wipro Ventures, and our own labs coming together to solve problems for our clients. And we also called out the fields of innovation that we're gonna focus on, be it robotics, be it agentic AI, be quantum, be it cyber resilience, be it, you know, blockchain.

[Srini Pallia, CEO & MD at Wipro]

Right? Those are the areas that we're working on. This is very important for the clients. For example, if you're doing a drug research, combination of quantum and AI will accelerate the whole drug discovery process, just to give you an example. So we'll continue to invest in that.

[Saurabh Govil, Chief Human Resources Officer at Wipro]

And on freshers, we had called out our endeavor is to look at about 10,000 freshers inducted in the fiscal. We'll see how it pans out quarter on quarter, and we'll keep you posted.

[Nisha Chandrasekaran, Manager - External Communications at Wipro]

We will have to conclude our q one FY twenty six earnings press conference. For all follow-up questions, please reach out to the media relations team, and we'll be happy to help you. Thank you, and we will see you next quarter.

Participants

Executives

• Nisha Chandrasekaran, Manager - External Communications
• Srini Pallia, CEO & MD
• Aparna Iyer, CFO
• Saurabh Govil, Chief Human Resources Officer

Analysts

• Sai Ishwarbharath B, India Company News Correspondent at Reuters
• Beena Parmar, Assistant Editor at The Economic Times
• Veena Mani, Special digital content specialist at The Times Of India
• Puneet Javeri, Senior Research Analyst at NDTV Profit
• Reshab Shaw, Senior Correspondent at moneycontrol
• Uma Kannan, Journalist at The New Indian Express
• Avik Das, Associate Editor at Business Standard
• Sanjana B, Business Reporter at The Hindu BusinessLine
• Ayanti Bera, Senior Correspondent at Financial Express (India)
• B D Narayankar, Journalist at United News of India
• C P Balasubramanyam, Senior Tech Journalist at Analytics India Magazine