Wipro is set to report its first-quarter results for FY27 today. Analysts expect a modest dip in dollar revenue and pressure on profit margins due to annual wage hikes and integration costs from recent acquisitions. Investors will focus on the company's growth outlook and the impact of AI investments on traditional IT services.
Wipro is scheduled to announce its financial results for the first quarter of fiscal year 2027 today. Market expectations suggest a muted start to the year, with U.S. dollar revenue projected to show a sequential decline of approximately 1.4%, bringing the total to $2,613 million. Constant-currency growth is also expected to remain largely flat as the company navigates a challenging demand environment.
Segment Performance and Strategic Drivers
The company’s IT services business is facing pressure from softer demand in the U.S. banking and financial services sector, alongside delays in the ramp-up of certain large deals. While organic growth remains tempered, Wipro is looking to inorganic expansion to bolster its numbers. The consolidation of recent acquisitions, such as Mindsprint and Alpha Net Consulting, is expected to provide some support to the overall revenue figures. Additionally, the $1 billion, eight-year deal with Olam is anticipated to be a key pillar for the retail segment, while the Harman acquisition continues to contribute to the technology and communication verticals.
Profit Margins and Cost Factors
Profitability is expected to be under pressure during this quarter. Analysts estimate that EBIT margins may contract by about 95 basis points to 16.3%. This projected decline is primarily attributed to annual wage increases, which are expected to raise employee costs by roughly 3.6% sequentially. Furthermore, ongoing investments in artificial intelligence and higher depreciation expenses stemming from recent acquisitions are adding to the cost burden. While the depreciation of the Indian rupee against the dollar is expected to provide a partial offset, it may not be enough to fully neutralize these margin pressures.
Valuation and Peer Context
Wipro currently trades at a valuation of approximately 13 times its estimated earnings per share for fiscal year 2028. This represents a significant discount when compared to the median valuation of major domestic IT peers, which trade at roughly 21.2 times their FY28 estimated earnings. This discount reflects market concerns regarding Wipro's earnings growth visibility, with estimates pointing to a compound annual growth rate of approximately 3.4% between FY26 and FY28.
What Investors Should Monitor
Following today’s earnings release, the focus will shift to management's guidance for the second quarter of FY27, with expectations leaning toward a modest growth range of -1% to +1% in constant currency. Beyond the headline numbers, investors will likely track management commentary on how AI-driven deflation is impacting traditional IT service pricing. Additionally, the integration progress of recent acquisitions, the health of the European business, and the pipeline for new large deals will be critical factors in assessing the company’s growth trajectory for the remainder of the fiscal year.