Company Performance - Wipro Limited shares increased by 2.83% to ₹256.21 during Tuesday's trading session, making it one of the top gainers in the IT sector [1] - The stock opened at ₹249.30 and reached a high of ₹257.17, with trading volumes of 117.62 lakh shares worth ₹300.29 crore [1] Sector Overview - The gains for Wipro coincided with a broader recovery in the IT sector, as the Nifty IT index rose over 2%, with all constituents trading positively [2] - Wipro was the second-best performer in the IT sector, following Infosys, which led the rally with nearly 4% gains after announcing share buyback plans [2] Corporate Actions - On September 9, Wipro allotted 61,954 equity shares under the ADS Restricted Stock Unit Plan 2004 and 163,524 shares under the Restricted Stock Unit Plan 2007 following ESOP exercises [3] Market Sentiment - The sector-wide rally was initiated by Infosys' board decision to consider a share buyback proposal, which boosted investor sentiment across IT stocks [4] - Market analysts suggest that the buyback announcement has raised expectations for similar shareholder-friendly actions from other large IT companies [4] Economic Factors - The weakening rupee, which recently reached an all-time low of 88.36 against the dollar, is providing additional support for IT companies that generate significant revenues from US markets [5] - Despite the recent gains, the Nifty IT index remains down 19% year-to-date, reflecting ongoing concerns over potential US tariffs on software exports and global tech spending softness [5]

Summary of the Conference Call on India IT Services Industry Overview - The conference call focused on the **India IT Services** industry, discussing its evolution over the last two decades and analyzing key drivers of stock performance [1][3]. Core Insights - **Current Economic Cycle**: The US nominal GDP growth is expected to slow, with a weak multiplier effect due to volatile macroeconomic conditions and a technology transition cycle [6][9]. - **India IT Exports**: There is a prolonged slowdown in India IT exports, with a notable impact from the digital and cloud cycle, which experienced a temporary break due to COVID-19 [7][12]. - **Revenue Growth Trends**: Revenue growth recovery for India IT services is anticipated to be gradual, contrasting with previous cycles such as post-GFC and post-COVID-19 [12][70]. - **Market Fragmentation**: The global IT services market remains fragmented, with the top 20 vendors accounting for only about 28% of total spending [18][19]. Key Data Points - **Growth Rates**: The year-over-year growth rate for India IT/ITES exports has shown fluctuations, with a significant decline noted during macroeconomic slowdowns [7][82]. - **CIO Expectations**: According to the MS AlphaWise CIO Survey, 90% of CIOs expect stable to increased levels of IT spending over the next three years, although near-term growth expectations are lower than historical averages [84][87]. - **Revenue Composition**: The revenue mix for major players like Infosys, TCS, and Wipro shows a significant share in application implementation and managed services, indicating a shift in service offerings [96]. Additional Insights - **Global Capability Centers (GCCs)**: There has been an accelerated pace of GCC additions in India, with 120 GCCs expected to be added per year over FY24-25, reflecting the demand for low-cost tech talent [81][82]. - **Valuation Trends**: The two-year forward P/E ratios for major IT companies are currently lower than their five-year averages, indicating a cautious market outlook [97][100]. - **AI Adoption**: The adoption of AI is seen as a potential growth driver for India IT services, with expectations that it will not dilute margins but could enhance profitability depending on investment strategies [93][94]. Conclusion - The India IT Services industry is navigating a complex landscape characterized by macroeconomic challenges, evolving technology cycles, and shifting client expectations. The gradual recovery in revenue growth, coupled with the strategic adaptation of business models, positions the industry for potential long-term growth despite current headwinds [79][80].

Financial Data and Key Metrics Changes - IT Services revenue for Q1 was $2.59 billion, reflecting a quarter-on-quarter decline of 2% in constant currency terms, which is within the guidance range [8][21] - IT Services margin was 17.3%, an expansion of 80 basis points year-on-year [8][22] - Net income grew by 10.9% year-on-year, with EPS at INR 3.20, reflecting a 10.8% year-on-year increase [25][26] - Free cash flow generation was robust at 115% of net income, with gross cash including investments at $6.4 billion [26][27] Business Line Data and Key Metrics Changes - In the Americas, revenue grew 1.5% year-on-year in constant currency terms, while APMEA's revenue remained flat [9][23] - BFSI sector declined 3.8% sequentially and 3.5% year-on-year, while Healthcare grew 0.5% sequentially and 3.5% year-on-year [24] - Capco grew 6% year-on-year, driven by strong performance in Latin America [9][24] Market Data and Key Metrics Changes - Europe faced headwinds with a sequential decline of 6.4% and a year-on-year decline of 11.6% [23] - Digital spending in India, the Middle East, and Southeast Asia kept the market resilient [9] Company Strategy and Development Direction - The company is focusing on AI-led efficiency and transformation, with a strategic shift towards consulting-led and AI-powered solutions [16][47] - The management emphasized the importance of vendor consolidation and cost takeout deals, which are expected to drive future growth [12][22] - The company aims to maintain a balance between renewing existing contracts and securing new business [13][111] Management's Comments on Operating Environment and Future Outlook - Management noted significant macro uncertainty affecting overall demand, with clients prioritizing cost optimization and AI initiatives [6][7] - The outlook for the second half of the year is positive, supported by a strong order book and healthy pipeline [19][56] - The company is guiding for a sequential revenue growth of -1% to +1% in constant currency terms for the next quarter [19][28] Other Important Information - The Board declared an interim dividend of INR 5 per share, with a commitment to pay dividends twice a year [27][28] - The company reported bookings worth $5 billion in total contract value, a growth of 51% year-on-year, with large deal bookings reaching $2.7 billion, up 131% year-on-year [12][22] Q&A Session Summary Question: On deal wins and ACV growth - Management acknowledged that while TCV has grown, ACV growth has not kept pace due to longer deal tenures and a focus on cost takeout [31][32] Question: On capital allocation and dividend policy - The company has moved towards a dividend-focused capital allocation policy, with buybacks remaining an option for the future [34] Question: On margins and deal execution - Management indicated that while current margins are strong, there may be pressures due to upfront investments in large deals, but they aim to maintain margins in the 17% to 17.5% range [40][52] Question: On customer-specific challenges in Europe - Management stated that client-specific challenges in Europe are largely behind them, and they expect stabilization and growth in the second half of the financial year [99][100] Question: On discretionary spending trends - Management noted that discretionary spending is returning in pockets, particularly around data, AI, and modernization projects [113]

Financial Data and Key Metrics Changes - IT Services revenue for Q1 FY 2026 was $2,590 million, reflecting a quarter-on-quarter decline of 2% in constant currency terms, which is within the guidance range [8][21] - IT Services margin was 17.3%, an expansion of 80 basis points year-on-year [8][22] - Net income grew by 10.9% year-on-year, with EPS at INR 3,200, reflecting a 10.8% year-on-year increase [25][26] - Free cash flow generation was robust at 115% of net income, with gross cash reaching $6,400 million [26] Business Line Data and Key Metrics Changes - In the Americas, revenue grew 1.5% year-on-year in constant currency terms, while APMEA's revenue remained flat [9][23] - BFSI sector declined 3.8% sequentially and 3.5% year-on-year, while Healthcare grew 0.5% sequentially and 3.5% year-on-year [24] - Capco grew 6% year-on-year, driven by strong performance in Latin America [9][24] Market Data and Key Metrics Changes - Europe faced a decline of 6.4% sequentially and 11.6% year-on-year, with clients focused on maintaining competitiveness [23][24] - Digital spending in India, the Middle East, and Southeast Asia kept the market resilient [9] Company Strategy and Development Direction - The company is focusing on AI-led efficiency and transformation, with a strategic shift towards consulting-led and AI-powered solutions [17][48] - The company aims to build an AI-first enterprise, integrating AI capabilities into industry solutions [17][18] - The outlook for the next quarter is cautious, with guidance for sequential growth of -1% to +1% in constant currency terms [19][28] Management's Comments on Operating Environment and Future Outlook - Management noted significant macro uncertainty affecting overall demand, with clients prioritizing cost optimization and vendor consolidation [6][7] - The company expressed confidence in the second half of the year due to a strong order book and healthy pipeline [19][57] Other Important Information - The Board declared an interim dividend of INR 5 per share, with a commitment to pay dividends twice a year [27][28] - The company reported bookings worth $5 billion in total contract value, a growth of 51% year-on-year, with large deal bookings reaching $2.7 billion, up 131% year-on-year [13][14] Q&A Session Summary Question: On deal wins and ACV growth - Management acknowledged that TCV has been growing faster than ACV due to a mix of longer-tenure deals and vendor consolidation [32][33] Question: On capital allocation and dividend policy - The company has moved towards a dividend-focused capital allocation policy, with buybacks remaining an option [35] Question: On margins and deal execution - Management indicated that while current margins are strong, there may be pressures due to upfront investments in large deals [39][40] Question: On deal wins in traditionally weak areas - The company has invested in domain expertise and focused on consulting-led strategies to win deals in new sectors [48][49] Question: On discretionary spending and project pauses - Certain projects remain paused due to ongoing evaluations of tariffs and geopolitical factors, but management is hopeful for future investments [52] Question: On client metrics and active clients - The decline in active clients is attributed to a weak discretionary spend environment, but the company continues to focus on large accounts [98] Question: On competitive pressures and pricing - Management acknowledged competitive pricing pressures in the current environment but emphasized the importance of execution [119]

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 decreased by 2.0% QoQ and 2.3% YoY in constant currency terms [26] - Net income for the quarter was ₹33.3 billion, a decrease of 6.7% QoQ and an increase of 10.9% YoY [26] - EPS was ₹3.2 ($0.041), a decrease of 6.7% QoQ and an increase of 10.8% YoY [26] - IT Services Operating Margins was at 17.3%, down by 0.2% QoQ and expansion of 0.8% YoY [26] Bookings and Deals - Total bookings were $4,971 million, up by 24.1% QoQ and 50.7% YoY in constant currency [28] - Large deal bookings were $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] - Top customer concentration is at 4.7% of revenue [12]

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].