Whalesbook
Revenue Misses Outweigh Margin Gains
Wipro reported USD 2.65 billion in IT services revenue for the fourth quarter of fiscal year 2026. This was a modest 0.2% increase quarter-over-quarter, falling short of the 1.0% growth analysts had predicted. However, Wipro exceeded profitability expectations, with its adjusted operating margin reaching 17.2%, surpassing the estimated 16%. For the full fiscal year 2026, Wipro's gross revenue was ₹926.2 billion ($9.9 billion), a 4.0% year-on-year rise. The IT services operating margin for the year was 17.2%, up 0.2% from the previous year.
Despite the margin gains, Wipro's stock experienced selling pressure. Its American depositary receipts (ADRs) fell 1.71% in pre-market trading, as investors reacted to the revenue shortfall and a difficult outlook. The share price dropped about 4% on April 17, 2026, following the results release, trading near ₹204. This decline is part of a larger trend: Wipro's stock is down 15.07% over the past year, significantly lagging the broader Sensex index. As of April 17, 2026, the company's market value was approximately $23.67 billion.
Wipro Trails Rivals TCS, HCLTech
Wipro's performance trails its larger Indian IT rivals. Tata Consultancy Services (TCS) posted a stronger FY26 finish, with Q4 FY26 revenue up 1.5% quarter-over-quarter to $7,621 million and operating margins hitting a four-year high of 25.3%. TCS also secured significant Total Contract Value (TCV) wins, totaling $12 billion for Q4 and $40.7 billion for the year. HCL Technologies reported 6.1% year-on-year revenue growth in its fourth quarter and projects FY26 EBIT margins between 18% and 19%. Infosys, awaiting its results, is expected to report revenue growth around 14% year-on-year with EBIT margins expanding to 21.40%. The Indian IT sector is generally experiencing moderate growth, with analysts anticipating a gradual recovery fueled by AI, though near-term forecasts remain cautious due to economic uncertainties. Wipro's price-to-earnings (P/E) ratio is around 15-16x, while TCS trades at a higher 25-27x, indicating differing market views on growth potential.
Concerns Mount Over Future Growth
Significant concerns surround Wipro's future growth. The company's guidance for Q1 FY27 forecasts IT services revenue between $2.60 billion and $2.65 billion, indicating a sequential decline of -2.0% to 0%. This outlook, combined with a reported 1.3% quarter-over-quarter revenue drop in Q4, suggests a potential revenue contraction. Wipro’s reported 1.6% year-on-year revenue decline for FY26 highlights its underperformance compared to rivals and raises questions about its ability to achieve revenue growth. The value of large new contracts, a key indicator for future revenue, fell 18% year-on-year. While sequential bookings improved, with total bookings up 3.2% and large deal bookings up 65.1% quarter-over-quarter, some analysts noted Wipro's overall order book decreased by 1% to $16.9 billion. This contrasts with larger sequential increases reported by peers like Infosys. Major brokerages have reacted by lowering target prices. Morgan Stanley maintained an 'Underweight' rating with a ₹192 target, and Goldman Sachs reiterated a 'Sell' rating with a ₹187 target. Projections also suggest Wipro's margins might not reach the 17%-17.5% range in FY27.
Buyback Announced Amid Cautious Outlook
To support shareholder returns, Wipro's board approved a ₹15,000 crore ($1.6 billion) share buyback program, priced at ₹250 per share, pending shareholder approval. Despite this move and the strong margin performance, analyst sentiment remains cautious. While some analysts offer neutral ratings, like Motilal Oswal's 'Neutral' with a ₹215 target, overall consensus views lean bearish. TipRanks shows an average analyst target price of ₹233.75, but also a 'Moderate Sell' consensus rating. MarketScreener lists a 'Hold' consensus with an average target of ₹209.80. Wipro aims to leverage AI opportunities through its new 'AI Native Business & Platforms' unit, but investors are focused on execution and demand recovery in the near term.