Wipro Q2 preview: IT major to post muted profit growth on margin pressures

Analysts forecast a sequential decline in Wipro's Ebit margin despite rupee depreciation, mainly due to upfront costs linked to large deals, analysts said

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Technology major Wipro Ltd. is likely to post muted September-quarter earnings, with margins likely to come in at a tight range driven by upfront costs. 

 

The information technology (IT) firm will report its earnings for the second quarter of the financial year 2026 (FY26) on Thursday, October 16. 

 

The company's revenue is expected to increase marginally by 2.73 per cent quarter-on-quarter (Q-o-Q) to ₹22,757.05 crore, according to consensus estimates tracked by Business Standard. Amid a flat margin, Wipro's bottom line is likely to slip nearly 2 per cent to ₹3,264.35 crore. 

 

However, on a year-on-year (Y-o-Y) basis, the top and bottom line is expected to rise by 2.22 per cent and 1.73 per cent, respectively. 

 

Analysts forecast a sequential decline in Ebit margin despite rupee depreciation, mainly due to upfront costs linked to large deals, analysts said. Key things to watch include commentary on the consulting business, particularly in the BFSI vertical, client-specific issues, the large-deal pipeline and its impact on margins, and the outlook for client discretionary spending.

 

In the June quarter, the tech services firm reported a 6.7 per cent sequential decline in its net profit to ₹3,330 crore for Q1FY26. Revenue for Q1 stood at ₹22,134.6 crore, down 1.6 per cent on a Q-o-Q basis.   ALSO READ| Infosys Q2 preview: Revenue to rise on deal wins; BFSI vertical resilient

Here's how analysts of various brokerages expect Wipro to fare in Q2:

Kotak Securities:  The brokerage expects Wipro's growth to be near the midpoint of its guidance at 0.2 per cent Q-o-Q in CC, marking an improvement from the underwhelming performance in the previous quarter.

 

The brokerage forecasts a 40 basis points Q-o-Q decline in Ebit margin despite rupee depreciation, mainly due to upfront costs linked to large deals. It expects the large-deal total contract value (TCV) to be around $1.5 billion, a strong outcome given the company’s recent aggressive pursuit of large deals.

 

Kotak Securities projects revenue growth guidance in the range of minus 0.5 per cent to plus 1.5 per cent. It highlights the ramp-up of the Phoenix and other mega-deals as positives for the quarter, while noting furloughs and a weak demand environment as key negatives. 

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Nuvama Institutional Equities:  The brokerage expects Wipro’s IT services revenue to grow 0.1 per cent sequentially in CC and 0.2 per cent in US dollar terms, close to the midpoint of its guidance. Margins are expected to decline by 40 basis points sequentially.

 

The brokerage expects Wipro to give revenue growth guidance of 0-2 per cent quarter-on-quarter in constant currency for Q3FY26, driven by the ramp-up of the Phoenix deal.

 

Motilal Oswal:  Analysts expect Wipro’s IT services revenue to grow 0.3 per cent, supported by a one-month inorganic contribution from the Harman acquisition. Margins are likely to remain in a tight range of around 16.3 per cent, due to upfront costs associated with large deal ramp-ups. Organically, Wipro is expected to report flat constant currency growth, close to the midpoint of its guidance.

 

The brokerage notes that Europe is stabilising after client-specific issues, although recovery is expected to be gradual. The second half of the fiscal year is expected to outperform the first half, supported by strong deal closures in the first quarter, with execution on ramp-ups remaining a key monitorable.