Wipro has entered into a multi-year agreement with Odido Netherlands to deliver an AI-enabled transformation of the Dutch telecommunications provider’s IT landscape. Under the terms of the engagement, Wipro will oversee the modernisation and automation of Odido’s digital and enterprise technology systems across its business and consumer segments. The project is structured around a self-funded model, with cost savings from efficiency improvements being reinvested into further digital initiatives. Wipro w ...

Core Viewpoint - Tata Consultancy Services (TCS) is pursuing a distinct artificial intelligence (AI) strategy with a $6.5 billion investment in building and managing data centers, setting it apart from its peers in the IT services industry [1][2][4]. Group 1: TCS's AI Strategy - TCS plans to build a 1GW AI data center in India, marking its most significant shift since going public in 2004 [2][4]. - The company aims to become the "world's largest AI-led tech services company" by expanding its presence across the AI technology cycle [4]. - TCS will sell solutions to various clients, including pure-play AI providers, deep tech companies, hyperscalers, the Indian government, and local enterprises [5]. Group 2: Analyst Reactions - Analysts are divided on TCS's strategy, with some viewing it as a small step in the context of global AI investments and India's reliance on US tech giants [7]. - Concerns have been raised about limited synergies with TCS's existing service offerings, as the data center will function as a sovereign colocation site with low technology intensity [8][9]. - Some analysts believe that while this direction could create new revenue streams, it may negatively impact margins, with TCS management indicating it could take 18 to 24 months to generate related revenues [10][11]. Group 3: Competitors' Strategies - Competitors like Infosys, HCL Technologies, Wipro, and Tech Mahindra are integrating AI into their existing software services rather than pursuing a separate infrastructure strategy [3][6]. - Infosys is focusing on enterprise AI projects, having delivered over 2,500 GenAI and 200 agentic AI client projects [11]. - HCL Technologies reported $100 million in AI revenue, becoming the first of the big five to classify business from AI [13]. - Wipro is embedding AI in its solutions and has developed over 200 AI agents and platforms [16]. - Tech Mahindra is working on indigenous AI models for government use, aligning with the India AI Mission [18]. Group 4: Financial Performance - The top five IT services companies, including TCS, Infosys, HCLTech, Wipro, and Tech Mahindra, reported revenues of $7.47 billion, $5.08 billion, $3.64 billion, $2.6 billion, and $1.59 billion, respectively, with sequential growth rates of 0.61%, 2.73%, 2.79%, 0.65%, and 1.41% [19].

Financial Data and Key Metrics Changes - IT services revenue for Q2 FY26 was $2.6 billion, with a sequential growth of 0.3% in constant currency and a year-on-year decline of 2.6% in constant currency [5][12] - Adjusted operating margin for the quarter was 17.2%, an improvement of 0.4% compared to the same period last year [5][12] - Operating margins contracted by 60 basis points quarter-on-quarter and 10 basis points year-on-year, impacted by a one-off charge due to a client bankruptcy [12][14] Business Line Data and Key Metrics Changes - Americas One grew 0.5% sequentially and 5% year-on-year, while Americas Two declined 2% sequentially and 5% year-on-year [12] - Europe returned to sequential growth of 1.4% but declined 10.2% year-on-year, driven by BFSI [12][13] - Appmea grew 3.1% sequentially and 2.6% year-on-year, with CapCo showing a year-on-year growth of 3.2% [12][14] - BFSI grew 2.2% sequentially but declined 4% year-on-year, while healthcare declined 0.2% sequentially but grew 3.9% year-on-year [13][14] Market Data and Key Metrics Changes - Strong performance in healthcare, technology, and communication sectors in the Americas [5][7] - Tariff uncertainties are impacting consumer, energy, and manufacturing sectors, leading to reevaluation of supply chains [7] - The healthcare sector is undergoing structural changes, with Wipro actively supporting clients through this transition [7][75] Company Strategy and Development Direction - Focus on AI-powered transformations and consulting-led programs, with a strong emphasis on vendor consolidation [8][10] - Introduction of Wipro Intelligence, a unified suite of AI-powered platforms and solutions aimed at enhancing client productivity and efficiency [9][10] - Strategic partnerships, such as with a leading UK financial company and a European distribution firm, to modernize operations and drive growth [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in future growth despite current challenges, with expectations for sequential IT services revenue growth of -0.5% to +1.5% in Q3 [11][15] - The company is focused on converting a strong backlog into revenue while maintaining operational discipline [11][15] - Management acknowledged the impact of large deal ramp-ups on margins, with a commitment to maintain margins in a narrow band [22][30] Other Important Information - The acquisition of Harman Digital Transformation Solutions is expected to close in the upcoming quarter, which is not factored into current revenue guidance [15] - Net income and EPS grew 1% year-on-year, with operating cash flows at 104% of net income for Q2 [14] Q&A Session Summary Question: Thoughts on deal to revenue conversion and future growth - Management indicated that large deal wins in BFSI are expected to ramp up in Q3, contributing to future growth [18][19] Question: Outlook on margins - Margins are expected to remain in a narrow band of 17% to 17.5%, with ongoing investments impacting margins [20][30] Question: Growth outlook despite strong deal wins - Management acknowledged the positive momentum from large deal wins but emphasized the need to convert these into revenue [27][28] Question: Client-specific challenges in Europe - Management confirmed that previous client-specific issues are behind them, and they expect growth to continue in Europe [52] Question: Impact of bankruptcy on revenue - No impact on Q2 revenue was reported, with provisions made for bad debts [85]

Financial Data and Key Metrics Changes - IT services revenue for Q2 FY 2026 was $2.6 billion, with a sequential growth of 0.3% in constant currency and a year-on-year decline of 2.6% in constant currency [5][12] - Adjusted operating margin for the quarter was 17.2%, an improvement of 0.4% compared to the same period last year [5][12] - Operating margins contracted by 60 basis points quarter-on-quarter and 10 basis points year-on-year, impacted by a one-off charge due to a client bankruptcy [12][14] Business Line Data and Key Metrics Changes - Americas 1 grew 0.5% sequentially and 5% year-on-year, while Americas 2 declined 2% sequentially and 5% year-on-year [12] - Europe returned to sequential growth of 1.4% after several quarters, while APMEA grew 3.1% sequentially and 2.6% year-on-year [12] - BFSI grew 2.2% sequentially but declined 4% year-on-year, while healthcare declined 0.2% sequentially but grew 3.9% year-on-year [12][14] Market Data and Key Metrics Changes - Strong performance in healthcare, technology, and communication sectors in the Americas [5] - Europe and APMEA markets showed growth, with BFSI leading the recovery in Europe [6][7] - Tariff uncertainties impacted consumer, energy, and manufacturing sectors, leading to reevaluation of supply chains [7] Company Strategy and Development Direction - Focus on AI-powered transformations and vendor consolidation as key drivers for growth [8][10] - Introduction of Wipro Intelligence, a unified suite of AI-powered platforms, to enhance client capabilities [9][10] - Strategic partnerships in Europe to modernize operations and improve customer experiences [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in future growth despite current challenges, with expectations for revenue growth in Q3 projected between -0.5% to +1.5% in constant currency [11][15] - Emphasis on converting strong backlog into revenue while maintaining operational discipline [11][15] - Management acknowledged ongoing pressure on margins due to investments for growth but aims to maintain margins within a narrow band [12][22] Other Important Information - The company closed $4.7 billion in total contract value and signed 13 large deals in the quarter [8] - The Harman Digital Transformation Solutions acquisition is expected to close in the upcoming quarter, which is not included in current revenue guidance [15] Q&A Session Summary Question: Thoughts on deal to revenue conversion in BFSI - Management noted that large deal wins in BFSI are expected to ramp up in Q3, contributing to future growth [18][19] Question: Outlook on margins - Management indicated that while there are headwinds due to large deal ramp-ups, operational improvements and forex factors have been positive [21][22] Question: Growth outlook despite strong deal wins - Management acknowledged the positive momentum from large deal wins but guided for a cautious outlook due to potential volatility [27] Question: Client-specific challenges in Europe - Management confirmed that previous client-specific issues are behind them, and they expect growth to continue in Europe [52] Question: Impact of bankruptcy on revenue - Management clarified that there was no impact on Q2 revenue from the bankruptcy provision made [85]

Financial Data and Key Metrics Changes - IT services revenue for Q2 FY26 was $2.6 billion, with a sequential growth of 0.3% in constant currency and a year-on-year decline of 2.6% in constant currency [4][10] - Adjusted operating margin for the quarter was 17.2%, an improvement of 0.4% compared to the same period last year [4][10] - Operating margins contracted by 60 basis points quarter-on-quarter and 10 basis points year-on-year, impacted by a one-off charge due to a client bankruptcy [10][12] - Net income and EPS grew by 1% year-on-year, with operating cash flows at 104% of net income for Q2 [12] Business Line Data and Key Metrics Changes - Americas One grew 0.5% sequentially and 5% year-on-year, while Americas Two declined 2% sequentially and 5% year-on-year [10] - Europe returned to sequential growth of 1.4% after several quarters, driven by BFSI [5][11] - Appmea grew 3.1% sequentially and 2.6% year-on-year, while BFSI grew 2.2% sequentially but declined 4% year-on-year [11][12] - Healthcare declined 0.2% sequentially but grew 3.9% year-on-year [11] Market Data and Key Metrics Changes - Strong performance in healthcare, technology, and communication sectors in the Americas [4][5] - Tariff uncertainties impacted consumer, energy, and manufacturing sectors, leading to reevaluation of supply chains [5] - The Phoenix Group deal is expected to generate revenue from Q3, providing further momentum in Europe [5][11] Company Strategy and Development Direction - Focus on AI adoption and vendor consolidation as key drivers for growth [5][6] - Introduction of Wipro Intelligence, a unified suite of AI-powered platforms and solutions, aimed at enhancing client productivity and efficiency [7][8] - Continued investment in growth despite margin pressures, with a goal to maintain margins in a narrow band [10][12] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in future growth driven by large deal ramp-ups, particularly in BFSI [17][18] - Q3 guidance for IT services revenue growth is projected between -0.5% to +1.5% in constant currency [9][12] - Management acknowledged headwinds from seasonality and ongoing investments impacting margins [20][26] Other Important Information - The Harman Digital Transformation Solutions acquisition is expected to close in Q3, not factored into current revenue guidance [13][12] - Strong deal wins in Q2 included $4.7 billion in total contract value and 13 large deals [6][10] Q&A Session Summary Question: Thoughts on deal to revenue conversion in BFSI - Management noted that large deal wins in BFSI are expected to ramp up in Q3, with a mix of renewals and expansions [16][17] Question: Outlook on margins - Management indicated that margins are expected to remain in a narrow band of 17% to 17.5%, with ongoing investments impacting margins [19][25] Question: Growth sustainability and improvement - Management expressed confidence in sustaining growth, driven by a robust pipeline and execution of deal wins [28][30] Question: Clarity on renewal deals - Management clarified that renewal deals are a mix of renewals and expansions, with productivity gains expected to offset any deflationary pressures [70][71] Question: Impact of client-specific challenges in Europe - Management confirmed that client-specific challenges are behind them, with expectations for improved growth trajectory in Europe [42][43]

Financial Data and Key Metrics Changes - IT services revenue for Q2 FY 2026 was $2.6 billion, with a sequential growth of 0.3% in constant currency and a year-on-year decline of 2.6% [6][18] - Adjusted operating margin for the quarter was 17.2%, an improvement of 0.4% compared to the same period last year [6][19] - Net income and EPS grew by 1% year on year, while operating cash flows remained higher than net income at 104% for Q2 [23] Business Line Data and Key Metrics Changes - Americas One grew 0.5% sequentially and 5% year on year, while Americas Two declined 2% sequentially and 5% year on year [20] - Europe reported a sequential growth of 1.4% but a year-on-year decline of 10.2% [21] - APMEA grew 3.1% sequentially and 2.6% year on year, with strong performance in India, Australia, and Southeast Asia [21] - BFSI sector showed sequential growth of 2%, driven by Europe and APMEA [85] Market Data and Key Metrics Changes - The healthcare sector is undergoing structural changes, impacting performance, but remains a strong performer for the company [9][88] - Consumer, energy, and manufacturing sectors are facing tariff uncertainties, leading to reevaluation of supply chains [9] Company Strategy and Development Direction - The company is focusing on AI adoption and vendor consolidation as key strategies for growth [9][10] - Wipro Intelligence, a unified suite of AI-powered platforms, is being introduced to enhance client capabilities [13][14] - The company aims to maintain operational discipline while converting a strong backlog into revenue [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in future growth, particularly in BFSI, as large deals begin to ramp up [30][31] - The company anticipates a sequential IT services revenue growth of -0.5% to +1.5% in constant currency for Q3 [16][24] - Management acknowledged headwinds from large deal ramp-ups and seasonal factors affecting Q3 performance [35] Other Important Information - The Harman Digital Transformation Solutions acquisition is expected to close in the upcoming quarter, but revenues from this acquisition are not included in current guidance [24] - The company is actively investing in growth, which may pressure margins in the short term [19][35] Q&A Session Summary Question: Thoughts on deal to revenue conversion and future growth - Management noted that large deal wins in BFSI are expected to ramp up in Q3, contributing to future growth [28][29] Question: Margin outlook and transition costs - Management indicated that while there are headwinds from large deals, operational improvements and currency fluctuations have positively impacted margins [32][34] Question: Sustainability of year-on-year growth in line with peers - Management expressed confidence in sustaining growth, focusing on executing deal wins and maintaining a robust pipeline [50][52] Question: Clarity on renewal deals and their impact - Management clarified that renewal deals are a mix of renewals and expansions, with some deflationary pressures expected [95][96] Question: Impact of bankruptcy on revenue - Management confirmed that there was no impact on Q2 revenue from the bankruptcy provision made [99]