Wipro shares fell 3% after issuing a weak first-quarter revenue forecast, fueling concerns about slowing growth and persistent margin pressure for India's fourth-largest IT firm.
The company projects June-quarter revenue to range from a 2% sequential decline to flat growth. Wipro cited muted demand as U.S. banking and financial clients reduce spending amid economic uncertainty. This outlook follows a lackluster fourth quarter where the company missed analyst expectations for profit and revenue.
The weak forecast overshadowed record share buyback plans, causing Wipro's U.S.-listed shares to decline nearly 5% overnight. Analysts noted persistent organic growth challenges and entrenched revenue weakness, potentially marking a fourth straight year of decline for fiscal 2027.
Margin pressures are expected to continue due to salary hikes, integration of low-margin acquisitions, and competitively priced large deals. Wipro reported deal wins of $3.5 billion in the January-March quarter, a slight increase from the previous quarter but down from a year earlier. Strong deal bookings have yet to translate into revenue, with a growing share of large, long-tenure contracts delaying near-term growth.
The stock has fallen over 22% this year, making it the worst performer on the IT index amid concerns about AI disruption and demand uncertainties.