Wipro’s Q1FY26: Big Deal Wins, Margins Hold, but Growth Still Sluggish

Big Deals, Flat Revenues, and Why the Next Quarter Matters Most

Wipro’s first quarter of FY26 landed as a mixed bag. The company delivered on margins and announced another quarter of blockbuster large deal wins. However, top-line growth stayed stubbornly soft, especially compared to its larger IT rivals. Management now faces the classic challenge of translating these deals into sustainable, broad-based revenue acceleration.

Snapshot: Key Numbers at a Glance

• IT Services Revenue: $2,587 million, down 2% sequentially and down 2.3% YoY in constant currency. Revenue beat very muted expectations but still fell year-on-year.

  

• EBIT Margin (IT Services): 17.3%, up 80 basis points YoY, down 20 bps sequentially.

• Net Income: ₹33.3 billion ($388 million), up 10.9% YoY but down 6.7% QoQ.

• EPS: ₹3.2, up 10.8% YoY.

• Deal TCV: $4.97 billion, up 51% YoY. Large deal TCV at $2.7 billion, up 131% YoY with 16 large deals, including 2 mega deals.

  

• Attrition: 15.1% trailing 12 months, still elevated versus peers (Highest amongst the large-cap IT companies)

• Cash Flow: Operating cash flows at 123% of net income.

• Guidance: Q2 revenue guidance of (-)1% to +1% sequential growth in constant currency.

  

What’s Working, What’s Not

What’s Working:

• Deal Wins. The most encouraging sign this quarter was the acceleration in large deal activity. Mega deals came primarily from BFSI and semiconductors, and Capco (Wipro's BFSI consulting arm) continued to see healthy bookings and double-digit deal flow.

• Top Client Growth. Revenues from the largest clients remained strong. Top client revenue grew nearly 16% YoY, and the number of $50 million-plus accounts ticked up.

• Healthcare Resilience. Healthcare, Life Sciences, and Services stayed positive, growing both sequentially and YoY. This vertical has turned into a more reliable pillar for Wipro.

• Margins. EBIT margin inched up. This was thanks to a focus on SG&A savings, offshore leverage, and continued operational discipline.

What’s Not:

• Core Growth. Revenue growth remains patchy, with YoY declines in BFSI, consumer, and manufacturing. Europe, in particular, reported a sharp 11.6% drop compared to last year. Client-specific issues and macro headwinds were to blame.

• Attrition and Client Metrics. Attrition remains the highest among the top-tier IT pack. The number of $100 million clients has been shrinking, a sign that Wipro is still working to replace or upsell old wins.

• Broad-based Weakness. Outside of a handful of verticals, growth was hard to find. Consumer, retail, and manufacturing continue to be weighed down by weak discretionary spending and tariff uncertainty.

Deal Pipeline and Outlook

Wipro’s total bookings hit nearly $5 billion, with large-deal TCV at $2.7 billion for the quarter. Sixteen deals were signed, including two mega deals in banking and one in semiconductors. The company’s win rate in vendor consolidation deals was particularly high. Management emphasized that many of these wins involve cost takeouts and modernizations driven by data and AI which is a positive directional signal for future quarters.

Management expects these deals to ramp up over four to six quarters. Historically, Wipro’s challenge has been converting strong contract wins into meaningful, visible revenue growth. Compared to peers, Wipro’s TCV growth is outpacing the group, but revenue conversion rests on how quickly these new deals come online and begin to scale.

Management’s Perspective

CEO Srini Pallia struck a steady tone, acknowledging macro uncertainty and cautious client budgets.

He highlighted a clear theme: clients want immediate results, cost optimization, and AI at scale. “AI is no longer experimental,” Pallia commented, “It’s central to our clients’ strategies, and we are delivering real impact at scale.”

He noted progress in top client mining, growth in Capco bookings, and strong execution in healthcare. The management remains optimistic that the second half of FY26 will look much better than the first, as deal ramps land and client budgets unfreeze.

CFO Aparna Iyer emphasized robust margin management and reinforced the 17% to 17.5% EBIT margin aspiration, hinting that near-term pressure from large deal ramp-ups would be handled through ongoing operational leverage and pyramid optimization.

Valuation and Stock Reaction

The stock trades at about 20 times FY27 expected earnings, a discount to TCS and Infosys but only a modest gap versus Tech Mahindra. The re-rating from here likely hinges on visible revenue uptick from this big deal pipeline.

Final Thoughts

Wipro is at a crossroads. The company has built a record deal pipeline and is showing margin discipline, but broad-based growth is still missing. Management’s push on consulting-led, AI-first strategy, and large-client mining is yielding tangible sales results. For now, Wipro appears to be defending its base, with opportunities for a step up as these big deals enter the P&L. The critical question for the next quarter: will strong bookings finally show up as strong revenue growth, or will the wait continue?

If there’s one chart to watch next quarter, it’s the revenue line. Investors and followers would do well to focus not just on the deal wins but the actual conversion into higher, durable growth.

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