Wipro Ltd. announced a subdued performance for the second quarter of fiscal year 2026, with profit and revenue growth that missed analyst expectations. While the IT major demonstrated remarkable strength in securing large deals, its weak revenue figures and cautious guidance for the upcoming quarter have left investors concerned, leading to a drop in its share price by over 4.6% following the announcement. The results paint a picture of a company successfully winning client trust for future projects but struggling to translate it into immediate top-line growth.
For the quarter ending 30 September 2025, Wipro reported a consolidated net profit of Rs. 3,246 crore, a slight increase of 1.2% year-on-year. This analysis provides a deep dive into Wipro's Q2 performance and what it means for investors.
Table of Contents
- How Did Wipro Perform in Q2 FY26?
- The Silver Lining: What's Driving Wipro's Record Deal Wins?
- Why is Wipro's Guidance Cautious Despite Strong Deals?
- The Investor's Bottom Line: Strengths vs. Concerns
- Frequently Asked Questions (FAQs)
How Did Wipro Perform in Q2 FY26?
Wipro's financial metrics for the quarter reflect the broader headwinds faced by the IT services industry, with growth remaining largely flat.
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The company's IT Services operating margin stood at 16.7%. This figure was impacted by a one-time provision of Rs. 116.5 crore related to a customer's bankruptcy. Excluding this, the adjusted operating margin was 17.2%, representing a 0.4% expansion year-on-year.
The Silver Lining: What's Driving Wipro's Record Deal Wins?
The standout positive in Wipro's earnings report was its exceptional performance in securing large, long-term contracts.
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Massive Large Deal Wins: The company booked large deals worth $2.9 billion in Total Contract Value (TCV), a staggering 90.5% YoY growth.
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Strong H1 Performance: For the first half of FY26, Wipro's large deal bookings have already surpassed the total for the entire previous fiscal year (FY25), signalling a strong future revenue pipeline.
CEO Srini Pallia attributed this to a clear strategy focused on resilience and leadership in AI, stating, "Our revenue momentum is strengthening, with Europe and APMEA returning to growth... Bookings surpassed $9.5 billion for H1 FY26". This momentum is driven by clients seeking efficiency through vendor consolidation and cost-cutting opportunities in an uncertain macroeconomic environment.
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Why is Wipro's Guidance Cautious Despite Strong Deals?
Despite the record deal wins, Wipro's guidance for the third quarter remains cautious, reflecting ongoing uncertainty in client spending and the slow conversion of deals into revenue.
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Q3 FY26 Guidance: Wipro expects revenue from its IT Services business to be in the range of $2,591 million to $2,644 million. This translates to a muted sequential guidance of -0.5% to +1.5% in constant currency terms.
This cautious outlook suggests that a broad-based recovery is not yet on the horizon and that the new deals will take time to ramp up and contribute to the top line.
The Investor's Bottom Line: Strengths vs. Concerns
For investors, Wipro's Q2 results present a mixed picture, a classic "jam tomorrow" scenario where the promise of future growth is weighed against present-day challenges.
Strengths
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Exceptional Deal Pipeline: Wipro has demonstrated a robust performance in securing large deals, with massive year-over-year growth in big-ticket bookings. This indicates the company is successfully winning significant, long-term contracts that should fuel future revenue streams.
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Resilient Margins: Despite market and operational challenges, Wipro has managed to maintain its adjusted operating margins within a stable range. This reflects strong cost discipline and effective operational control.
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Recovery in Key Markets: The company has shown sequential growth in Europe and the APMEA regions, suggesting that a turnaround may be underway in these key geographies.
Concerns
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Weak Revenue Conversion: The primary concern lies in the sharp contrast between Wipro’s record deal wins and its sluggish revenue growth. This divergence highlights slow deal ramp-ups and execution delays in converting bookings into realised revenue.
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Underwhelming Guidance: Wipro’s cautious Q3 outlook, which includes the possibility of a sequential revenue decline at the lower end, points to continued near-term weakness and a lack of immediate growth momentum.
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Missed Estimates: The company’s failure to meet analyst expectations on both profit and revenue has negatively impacted market sentiment, resulting in a notable drop in its share price.
Frequently Asked Questions (FAQs)
What was Wipro's net profit in Q2 FY26?
Wipro reported a consolidated net profit of Rs. 3,246 crore, a slight increase of 1.2% year-on-year.
How strong were Wipro's deal wins in Q2 FY26?
Wipro's large deal bookings were a standout, growing 90.5% year-on-year to $2.9 billion. Total deal bookings for the quarter stood at $4.7 billion.
Why did Wipro's share price fall after the results?
Wipro's shares fell by over 4.6% because the company's profit and revenue missed analyst expectations, and its Q3 revenue guidance was cautious, signalling continued near-term weakness.
What is Wipro's revenue guidance for Q3 FY26?
Wipro has guided for IT services revenue to be between $2,591 million and $2,644 million, which translates to a sequential growth of -0.5% to +1.5% in constant currency.
What was Wipro's employee attrition rate in Q2?
The company's voluntary attrition on a trailing 12-month basis stood at 14.9%.