Financial Data and Key Metrics Changes - The IT services revenue for Q1 was $2,590 million, reflecting a 2% decline in constant currency terms, which is within the guidance range [7][20] - Operating margin for Q1 was 17.3%, an expansion of 80 basis points year on year [21] - Net income grew by 10.9% year on year, with earnings per share (EPS) at INR 3.2, a growth of 10.8% year on year [24][25] - Free cash flow as a percentage of net income was robust at 115% for the quarter [25] - The effective tax rate was 21.6% for Q1, down from 24.5% in Q1 2024 [26] Business Line Data and Key Metrics Changes - BFSI sector saw a decline of 3.8% sequentially and 3.5% year on year [23] - Healthcare grew by 0.5% sequentially and 3.5% year on year [23] - Consumer sector declined by 4% sequentially and 5% year on year [23] - Technology and communications grew by 0.4% sequentially but declined by 3% year on year [23] - Capco continued to perform well, growing by 6.1% year on year [24] Market Data and Key Metrics Changes - Americas market grew by 1.5% year on year in constant terms, with strong deal momentum [7] - Europe faced a decline of 6.4% sequentially and 11.6% year on year [22] - Digital spending in India, the Middle East, and Southeast Asia remained resilient [8] Company Strategy and Development Direction - The company is focusing on AI, data, and modernization programs, aligning with client priorities [5][6] - Emphasis on vendor consolidation and cost optimization as key drivers for deal wins [12][45] - The company aims to build an AI-first enterprise, integrating AI capabilities into industry solutions [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the macro environment, citing ongoing geopolitical uncertainties and tariff impacts [36][100] - Despite uncertainties, there is strong deal momentum in BFSI and technology sectors, with clients focusing on cost optimization and AI investments [37][102] - The outlook for the second half of the year appears positive due to a strong order book and healthy pipeline [18][71] Other Important Information - The board declared an interim dividend of INR 5 per share, distributing over $1,300 million in the last six months [26] - The company revised its capital allocation policy to pay out a minimum of 70% of net income over three years [27] Q&A Session Summary Question: What is the macro outlook right now? - Management acknowledged ongoing uncertainty in the macro environment, with geopolitical issues and tariffs affecting various industries [36] Question: What powered the Americas One performance despite sector declines? - Strong performance in health and communications sectors contributed to the growth in the Americas market unit [39] Question: Is discretionary demand returning? - Discretionary spending is returning in certain areas, particularly around AI and modernization projects [45] Question: How are large deal wins impacting financials? - Large deal wins will take time to ramp up, typically around six to eight quarters, but are expected to positively impact revenues [70] Question: What is the outlook for margins going forward? - Margins may face pressure due to upfront investments required for large deals, but management remains optimistic about maintaining profitability through operational excellence [98]

Financial Data and Key Metrics Changes - IT services revenue for Q1 was $2.59 billion, reflecting a 2% decline in constant currency terms, within guidance range [6][21] - IT services margin was 17.3%, an expansion of 80 basis points year on year [6][22] - Net income grew 10.9% year on year in Q1, with EPS at INR 3.2, a growth of 10.8% year on year [25][26] - Free cash flow as a percentage of net income was robust at 115% for the quarter [26][119] Business Line Data and Key Metrics Changes - BFSI sector saw a decline of 3.8% sequentially and 3.5% year on year, while healthcare grew 0.5% sequentially and 3.5% year on year [24] - Consumer sector declined 4% sequentially and 5% year on year, with technology and communications growing 0.4% sequentially but declining 3% year on year [24] - Capco continued to perform well, growing 6.1% year on year [25] Market Data and Key Metrics Changes - Americas market grew 1.5% year on year in constant terms, with strong deal momentum [6][23] - Europe faced a decline of 6.4% sequentially and 11.6% year on year [23] - Digital spending in India, Middle East, and Southeast Asia remained resilient [6] Company Strategy and Development Direction - Company is focusing on AI, data, and modernization programs, aligning with client priorities [4][5] - Emphasis on vendor consolidation and cost optimization as key drivers for deal wins [11][12] - Company aims to build an AI-first enterprise, integrating AI capabilities into industry solutions [16][17] Management Comments on Operating Environment and Future Outlook - Management expressed caution regarding the macro environment, highlighting ongoing geopolitical uncertainties and tariff impacts [37][39] - Strong order book and healthy pipeline provide confidence for long-term value delivery [18] - Guidance for Q2 indicates a sequential growth range of -1% to +1% in constant currency terms [28] Other Important Information - The board declared an interim dividend of INR 5 per share, distributing over $1.3 billion in cash in the last six months [27][120] - The company revised its capital allocation policy to pay out a minimum of 70% of net income over three years [27] Q&A Session Summary Question: What is the macro outlook right now? - Management acknowledged ongoing uncertainty due to geopolitical factors and tariffs, but noted strong deal momentum in BFSI and technology sectors [37][39] Question: What powered the Americas One performance despite sector declines? - Strong performance in health and communications sectors contributed to the growth in Americas One [40] Question: Is discretionary demand returning? - Discretionary spending is returning in certain pockets, particularly in AI and modernization projects [45] Question: How is AI impacting hiring and headcount changes? - AI efficiency is evolving, and while there is a need for AI-trained talent, the correlation between AI and hiring is not yet strong [48] Question: How are acquired companies contributing to growth? - Capco has performed well, growing 6% year on year, with robust bookings expected to continue [79]

Financial Performance - IT Services revenue reached $2,587.4 million in Q1'26 [26] - IT Services revenue decreased by 0.3% QoQ and 1.5% YoY in reported terms [26] - Non-GAAP IT Services revenue declined by 2.0% QoQ and 2.3% YoY in constant currency [26] - Net income for the quarter was ₹33.3 billion, a decrease of 6.7% QoQ but an increase of 10.9% YoY [26] - EPS was ₹3.2 ($0.041), down 6.7% QoQ but up 10.8% YoY [26] - IT Services Operating Margins stood at 17.3%, down by 0.2% QoQ but up 0.8% YoY [26] - Total bookings were $4,971 million, up 24.1% QoQ and 50.7% YoY in constant currency [28] - Large deal bookings reached $2,666 million, an increase of 49.7% QoQ and 130.8% YoY in constant currency [28] Other Key Metrics - The company has 1,282 active global clients [10] - The top customer concentration is at 4.7% of revenue [12] - The company has 16 customers with > $100M revenue [12]

Core Insights - Aduna has announced a partnership with leading global system integrators Wipro and Tech Mahindra to enhance enterprise adoption of network APIs [1][2] - The collaboration aims to integrate Aduna's network APIs into various industries, including financial services, manufacturing, logistics, and public sector [2][4] - This partnership is expected to facilitate the operationalization of network APIs at scale, connecting telecom capabilities with enterprise systems [3][4] Company Contributions - Tech Mahindra and Wipro will support Communication Service Provider (CSP) onboarding and accelerate operational readiness across multiple regions [6] - They will co-develop use case accelerators for key industries such as banking, logistics, and public services [6] - The collaboration will also facilitate the global rollout of network APIs through managed services and integration frameworks [6] Industry Context - Global system integrators play a critical role in bridging the gap between telecom capabilities and enterprise systems, enhancing security and compliance [3] - The telecom industry has significant opportunities to unlock value through APIs, fostering new business models and revenue growth [4] - Aduna aims to provide a standardized platform for collaboration among telecom operators and developers, enhancing user experiences and driving industry growth [8]

Revenue and Market Dependence - Approximately 62.3% of the IT Services segment revenue is derived from the Americas, including the United States, and 27.1% from Europe[30]. - The company’s revenues and expenses are difficult to predict due to fluctuations in the markets, increasing the likelihood of results falling below projections[24]. - The company’s reliance on technology spending by clients means that any decline in technology usage or spending could adversely impact revenues and profitability[29]. - The company generates approximately 99.7% of its revenue from IT Services, with 38% of this revenue derived from non-U.S. Dollar currencies, exposing it to exchange rate fluctuations[82]. - The Indian IT services sector is projected to grow by 4.3% year-over-year, reaching U.S.$137.1 billion in fiscal year 2025, driven by AI advancements and intensified cybersecurity needs[197]. - The global IT services spending grew at 4.7% year-over-year in calendar year 2024, with expectations for improved technology spending due to stabilizing inflation and interest rate cuts[195]. Economic and Geopolitical Risks - The company faces significant risks due to economic slowdowns in the Americas and Europe, which could adversely affect technology spending by clients[30]. - The company is exposed to risks from geopolitical conflicts, such as the situation between Russia and Ukraine, which could negatively impact client spending on IT services[30]. - The company is exposed to risks from geopolitical conditions and trade policies, which may hamper growth and have adverse macroeconomic effects[46]. Operational and Financial Risks - The company is making substantial investments in new facilities and physical infrastructures, which could impact profitability if business growth does not keep pace[26]. - The company’s business is highly dependent on clients' ability to pay dues and receivables, with potential adverse effects on operations and cash flows if clients face financial difficulties[34]. - The company faces risks related to government contracts, including potential termination without cause and the right of government entities to audit contract costs, which could negatively impact revenue and profitability[50][51]. - The company may incur additional debt for acquisitions, increasing interest expenses and limiting cash for other uses like stock repurchases[68]. - The company faces risks related to underpricing contracts and inaccurate cost estimations, particularly in outsourcing projects[75]. Compliance and Regulatory Challenges - The company is subject to stringent laws and regulations related to privacy, data protection, and cybersecurity, which could impact business operations if not complied with[93]. - The EU's GDPR imposes fines of up to €20 million or 4% of annual global revenue for noncompliance, whichever is greater[94]. - The California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA) create new consumer rights and impose civil penalties for violations, with the CPRA effective from January 1, 2023[99]. - The company is subject to various legal and regulatory requirements globally, which could result in fines or penalties for non-compliance[133]. Talent and Workforce Management - The company relies on a skilled workforce, and failure to attract and retain talent could impair business growth and revenue[86]. - Wage increases in India may diminish the company's competitive advantage and negatively affect profit margins, especially if it cannot hire in low-cost locations[80]. - The company is focused on building a diverse and global talent pool across various specializations, including consulting and technology[217]. Strategic Investments and Innovations - The company is making substantial investments in AI technologies, which may present business, financial, legal, and reputational risks if not successfully developed and deployed[56][58]. - Wipro is transitioning to an AI-first organization, utilizing its Lab45 GenAI platform and the Wipro Enterprise GenAI acceleration studio to unlock business value from AI[177]. - Wipro's services include a wide range of technologies, from GenAI and cloud computing to data and blockchain, addressing complex client needs[176]. Acquisitions and Mergers - The company may engage in future acquisitions that could face regulatory hurdles and may not meet expectations, potentially leading to financial losses[65][66]. - Wipro has completed several mergers and acquisitions in the last three fiscal years, enhancing its capabilities in various sectors[191]. - Integration of acquired entities could be time-consuming and expensive, impacting operational efficiency and personnel retention[69]. Financial Position and Capital Management - The company’s liquidity is influenced by its ability to generate cash flows and access capital markets, with potential adverse effects from increased borrowing costs[129]. - The company faces risks associated with indebtedness, including the ability to manage operations and generate sufficient cash flows to service debt[131]. - The company issued U.S.$ 750 million in senior unsecured notes due in 2026, bearing interest at a rate of 1.50% per annum[132]. Brand and Market Position - The company relies on a strong brand, and failure to maintain it could lead to a decline in share price and hinder business expansion[115]. - The company's insurance coverage may not be adequate to protect against all potential losses, which could materially harm financial condition and operating results[112]. Cybersecurity and Data Protection - The company is exposed to risks from cyberattacks, which could disrupt operations and lead to unauthorized access to sensitive data[106]. - Cybersecurity incidents could lead to significant reputational damage and financial obligations, impacting customer relationships and market position[104]. - The company may incur substantial costs related to compliance with evolving privacy and data protection laws, which could affect financial results[103]. Market and Economic Conditions - Political, social, and economic developments in India may impact the prices of the company's equity shares and ADSs[150]. - Adverse revisions to India's credit ratings could negatively impact the company's ability to raise financing and affect its financial condition[128]. - Changes in Indian tax laws, including the removal of Special Economic Zones (SEZs) benefits, could increase the company's effective tax rate[142].

Investment Rating - The report indicates a positive outlook for service providers that adapt to generative AI (genAI) technologies, suggesting a shift towards asset-based, solution-driven, and outcome-oriented business models [3][7]. Core Insights - Generative AI is significantly disrupting professional services, with providers facing pressure to reduce costs and improve efficiency. Clients are expecting up to 30% price reductions in project costs, prompting providers to innovate their delivery models [3][12]. - The report highlights that service providers must reinvent their business models to remain competitive in the AI era, focusing on automation and AI-powered delivery platforms to enhance productivity and quality [6][21]. - Major investments are being made by service providers in AI capabilities, with companies like IBM, Accenture, and PwC committing billions to enhance their AI service offerings [17][19]. Summary by Sections Disruption and Response - Service providers are on the front lines of genAI disruption, needing to adapt quickly to client demands for faster, cheaper, and higher-quality services [6][11]. - Providers are expected to build genAI-powered delivery platforms to automate tasks and improve service quality, which is crucial for maintaining competitiveness [21][23]. AI-Fueled Factors - Four key factors driving change include client expectations for lower costs, providers' lagging delivery capabilities, the slow emergence of AI computing services, and the need for new business models anchored in AI [11][12][14]. - Providers are making significant investments to build AI ecosystems and partnerships, which are essential for future business models [26][30]. New Service Offerings - The traditional time-and-materials pricing model is being challenged, with a shift towards managed service-as-software offerings that leverage AI to enhance operational efficiency [31][34]. - New AI services are emerging to reengineer business processes, focusing on automation and real-time data optimization [32][34]. Strategic Recommendations - Companies are encouraged to negotiate not just for lower prices but also for value-added services that can enhance their operational capabilities [38][41]. - Emphasis is placed on the importance of developing AI governance and leadership practices to effectively manage AI integration within organizations [42].

Core Viewpoint - Wipro Ltd's shares fell by as much as 6.3% following a disappointing revenue forecast for the June quarter, indicating concerns over a potential third consecutive year of revenue decline due to ongoing global tech spending cuts [1][2]. Group 1: Revenue Forecast and Market Reaction - Wipro expects revenue for the April-June period to decline between 1.5% and 3.5% sequentially, with the new CEO Srini Pallia highlighting increased uncertainties for the upcoming fiscal year [1][2]. - The company's shares have seen a year-to-date decline of 22.4%, which is slightly better than the broader Nifty IT index's 24.8% fall, reflecting growing investor skepticism about Wipro's future prospects [2][3]. Group 2: Analyst Reactions and Earnings Estimates - Analysts have expressed concerns that Wipro's first-quarter guidance could hinder any recovery efforts, with Phillip Capital noting it sets the stage for another challenging year following two years of revenue decline [4]. - Several brokerages, including Nomura and Nuvama, have reduced their FY26 and FY27 earnings estimates due to macroeconomic uncertainties and slowing project spends, with Nomura cutting its FY26 EPS estimates by 2-4% and revising the target price to ₹280 from ₹300 [5][6]. Group 3: Downgrades and Market Sentiment - At least nine out of 39 analysts covering Wipro have downgraded their ratings, and 20 have cut their price targets, with the median target price declining by nearly 14% to ₹250 over the past month [7]. - Emkay Global maintained a "Reduce" rating with a target of ₹260, citing low near-term visibility despite a strong deal pipeline [8]. Group 4: Performance Analysis - ICICI Securities described the March quarter's performance as "abysmal," pointing to weak revenues and macro concerns, particularly in discretionary sectors like auto and manufacturing [9]. - Motilal Oswal Financial Services (MOFSL) cut its FY26/FY27 EPS estimates by around 4%, anticipating a 1.9% year-over-year revenue decline in constant currency terms, while retaining a Sell rating with a target price of ₹215 [10]. Group 5: Positive Aspects and Future Outlook - Some brokerages noted improvements in capital allocation policies and a projected FY27 dividend yield of 4%, but the consensus remains that the near-term outlook is grim with little to trigger a re-rating of the stock [11].

Wipro Limited (WIT) Q4 2025 Earnings Conference Call April 16, 2025 09:30 AM ET Company Participants Moderator - Conference OperatorApartha Iyer - Chief Financial OfficerSrinivas Balya - Chief Executive Officer and Managing DirectorUnknown Speaker - Conference ParticipantDeepak Bohra - Corporate Treasurer and Head of Investor Relations Conference Call Participants Nitin Padmanabhan - Analyst, InvestecKumar Rakesh - Analyst, BNP ParibasGaurav Rateria - Analyst, Morgan StanleyAnkur Rudra - Analyst, JP MorganS ...

Financial Data and Key Metrics Changes - The IT services revenue for Q4 was $2.6 billion, reflecting a sequential decline of 0.8% and a year-on-year decline of 1.2% [11] - For the full year, IT services revenues were $10.51 billion, showing a year-on-year decline of 2.3% [12] - Operating margins for Q4 were at 17.5%, flat sequentially but expanded by 110 basis points year-on-year [11] - The net income grew by 6% quarter-on-quarter in Q4 and 19% for the full year, with an EPS of INR 12.6, a growth of 20% year-on-year [30] Business Line Data and Key Metrics Changes - The Americas region one grew 0.2% sequentially and 6% year-on-year, while Americas region two de-grew 1% sequentially and 1.8% year-on-year [13] - Europe de-grew 2.5% sequentially and 6.9% year-on-year [13] - The BFSI sector de-grew 0.5% sequentially but grew 0.8% year-on-year [14] - Capco performed well, growing 6.5% sequentially and 11.5% year-on-year [15] Market Data and Key Metrics Changes - The company closed 17 large deals in Q4 with a total value of $1.8 billion, and for the full year, 63 large deals worth $5.4 billion were closed, reflecting a year-on-year growth of 17.5% [15] - The healthcare sector de-grew 3.1% sequentially but grew 0.1% year-on-year [14] - The consumer sector de-grew 1.3% sequentially and was flat year-on-year [14] Company Strategy and Development Direction - The company is focused on driving consistent, profitable growth and has identified five strategic priorities to achieve this [10] - There is a strong emphasis on AI-powered solutions and consulting-led services to meet client needs [18] - The company has realigned its global business lines to better serve customer needs, effective April 1st [24] Management's Comments on Operating Environment and Future Outlook - The management noted that clients are approaching tech reinvention cautiously due to an uncertain macroeconomic environment and recent tariff announcements [9] - There is an expectation of a sequential revenue decline of 3.5% to 1.5% in constant currency terms for the upcoming quarter [27] - The management remains optimistic about the deal pipeline and expects to stabilize and bring growth back in Europe [121] Other Important Information - The company finished the financial year with a free cash flow as a percentage of net income at 118%, with gross cash including investments at $6.4 billion [31] - The company has hedged about $2.4 billion of forex derivative contracts as of the end of Q4 [32] Q&A Session Summary Question: Which verticals are seeing the highest impact currently? - The CEO noted that sectors like consumer and manufacturing, particularly automotive and industrial, are experiencing significant impacts due to the uncertain economic environment [38] Question: How is BFSI performing in the US and Europe? - BFSI is seeing good traction in the US and APMIA, but there are headwinds in Europe [41] Question: What is driving the weak revenue growth despite strong bookings? - The CFO explained that timing differences in deal conversions and ramp-downs due to lower discretionary spending are affecting revenue growth [53][54] Question: What is the outlook for Europe and its impact on overall performance? - The CEO mentioned that Europe has been a challenge, but there is a strong pipeline of deals and new leadership focused on improving performance [66][120] Question: How does the company plan to maintain margins in a weak revenue environment? - The CFO indicated that while there will be pressure on margins, the company aims to keep them in a narrow band through operational efficiencies and cost management [96][100]

Investors interested in Computers - IT Services stocks are likely familiar with Wipro Limited (WIT) and Accenture (ACN) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with spec ...