Wipro Q2 Results Preview: Steady Margins Expected Amidst Deal Ramps and Cost Headwinds
Wipro, one of India’s leading IT services companies, is set to announce its Q2 results, and analysts expect the company to report modest sequential revenue growth for the July–September quarter. The growth is expected to be driven by deal ramp-ups, which will offset the costs associated with these deals, thereby keeping margins steady.
Revenue and Profit Expectations
According to the Bloomberg consensus, Wipro’s revenue is expected to be around Rs 22,680 crore, which is a 2% increase from the previous quarter’s revenue of Rs 22,135 crore. The profit is expected to be around Rs 3,279 crore, which is a 2% decrease from the previous quarter’s profit of Rs 3,330 crore.
The EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is expected to rise by 5% to Rs 4,457 crore, with the margin expected to be around 19.65%, which is slightly higher than the previous quarter’s margin of 19.14%.
Analysts’ Expectations
Analysts from various brokerages have shared their expectations from Wipro’s Q2 results. Goldman Sachs expects Wipro’s Q2 revenue growth to be above the mid-point of the company’s guidance of -1% to +1%. They also expect the Q3 FY26 guidance to be around 0% to +2% quarter-on-quarter, with a sequential improvement in margins due to the absence of Q1 restructuring costs.
Jefferies expects Wipro’s IT services revenue to be flat quarter-on-quarter in constant currency, which is near the midpoint of the company’s guidance. They also expect the EBIT margin to decline by around 20 basis points due to ramp-up costs.
InCred expects Wipro’s constant currency revenue growth to be around 0.1%, driven by financial services, but partially offset by softness in consumer and healthcare. They also expect the services EBIT margin to be flat, as cost optimization and vendor consolidation balance headwinds.
Nomura expects Wipro’s revenue to grow by around 0.2% quarter-on-quarter in constant currency, which is within the guided range. They also expect the EBIT margin to decline by around 60 basis points due to upfront ramp-up costs of large deals.
HSBC expects Wipro’s constant currency growth to be around the mid-point of the company’s guidance of -1% to +1%, with a 20 basis point currency cushion. They also expect the EBIT margin to improve by around 40 basis points, aided by rupee depreciation.
Key Focus Areas
Analysts will be focusing on several key areas, including Q3 guidance, consulting and Europe demand, deal bookings, AI adoption, H-1B visa fee impact, and capital allocation. The company’s ability to ramp up large deals and its impact on near-term margins will also be closely watched.
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Conclusion
In conclusion, Wipro’s Q2 results are expected to be modest, with steady margins and sequential revenue growth. The company’s ability to ramp up large deals and its impact on near-term margins will be closely watched. Investors can expect the company to provide guidance on the next quarter and the impact of large deal ramps on near-term margin.