Whalesbook
Wipro Ltd. is set to release its fourth-quarter fiscal year 2026 results on April 16th. The report is expected to show a mixed financial performance. While a $1 billion strategic deal with Olam Group and the $375 million acquisition of Mindsprint Pte. Ltd. show strong business development, the company's organic performance and profit margins are facing challenges.
Q4 Earnings Preview: Modest Revenue, Margin Drop Expected
Analysts predict Wipro's dollar revenue will rise modestly by about 1.1% from the previous quarter to $2,666 million (₹24,343 crore). Earnings Before Interest and Taxes (EBIT) are forecast to reach ₹4,158 crore. However, EBIT margins are expected to narrow to 17.1% from 17.6%, mainly due to operational costs. Revenue growth in constant currency is projected to be slow at 0.4-0.5%, with acquisitions like Harman DTS adding an estimated 1.5-2%. This overall growth figure hides an expected 1% drop in organic revenue.
Why Margins Are Shrinking Amid Deal Costs
Profit margins are expected to decrease by 50 percentage points. This is due to a combination of factors, including recent wage increases, costs from acquisitions, and initial expenses for new large deals. Although a weaker rupee might offer a slight boost of 50-60 basis points, it's unlikely to fully cover these increased costs. The reported revenue growth heavily relies on acquisitions, indicating Wipro may be using expansion to offset a slowdown in its main business.
Share Buyback on the Table
A key development for investors is the board's potential approval of a share buyback program, expected to be valued between ₹16,000-18,000 crore. This could signal management's confidence in Wipro's future or help support shareholder value.
Wipro's Valuation vs. Competitors
Wipro's trailing twelve months (TTM) price-to-earnings (P/E) ratio is around 14.96 to 16.71. This valuation looks attractive compared to the Indian IT industry average P/E of about 22.2. Competitors like Infosys trade at a higher P/E of roughly 18.4, while Cognizant's is about 12.7. Wipro's market value stands near ₹2.15 trillion ($22.72 billion), making it a major player in technology services.
Analyst Views and Industry Trends
Analyst views are divided. Firms like CLSA note better momentum in securing large deals under CEO Srini Palia but point out that consistent revenue growth and market share increases have been hard to achieve. Analysts surveyed expect Wipro's constant currency growth for Q1 FY27 to be between -2.0% and +1.0%. The wider Indian IT sector is facing a tough Q4 FY26 due to global tensions and AI impacting prices, leading to lower growth forecasts for most major IT companies. Smaller, Tier-2 companies, however, are showing more flexibility and better performance.
Why Investors May Be Cautious
Investor caution might increase due to Wipro's history of stock price drops after Q4 earnings reports. For example, after Q4 FY25 results in March 2026, Wipro's stock fell 6% despite higher profits, blamed on weak future guidance and sector challenges. A similar drop of over 6% happened in April 2025 after Q4 FY25 results due to slow revenue growth and a decline in the IT services segment. Analysts from MarketBeat and other firms have given 'Reduce' or 'Underperform' ratings, citing worries about Wipro's competitive standing and ability to achieve steady growth. While peers like HCL Tech and Infosys show signs of recovery, Wipro is seen as underperforming.
Outlook for Q1 FY27 Guidance
The key indicator for Q4 FY26 will be Wipro's forecast for the first quarter of fiscal year 2027. Analysts expect this guidance to be between -1.0% and +1.0% in constant currency, reflecting the uncertain economy and possible continued hesitation in client spending. The company's AI360 strategy and its customer adoption will also be under close observation.