Wipro Ltd on Wednesday marked a second straight year of falling revenue, even as it braced for its weakest start to a new fiscal year amid concerns over global technology spending.
India’s fourth-largest information technology (IT) services company reported $10.51 billion in revenue for FY25, down 2.72% from the previous year, even as net profit jumped 19% to $1.54 billion. While the numbers beat analysts’ estimates, falling revenue and rising uncertainties challenge Wipro’s ability to kickstart growth, a year after Srinivas Pallia took over as chief executive.
A Bloomberg survey had estimated a revenue of $10.29 billion and profit of $1.48 billion.
“The global industry environment remained uncertain for most of the year, and of course, the recent tariff announcements have only added to that,” Pallia told media after the earnings announcement. The company now expects to end the June quarter with revenue of $2.51-2.56 billion, which would be 3.5% to 1.5% lower than in the March quarter in constant currency terms, its slowest start to a new fiscal year. Constant currency does not take currency fluctuations into account.
“Given the uncertainty in the environment, we expect our clients to take a more measured approach going forward, especially on two spend areas, large transformation programmes and discretionary spend,” said Pallia.
The caution follows US president Donald Trump announcing so-called reciprocal tariffs on 2 April, and then suspending them a week later following intense market turbulence. Such uncertainty might prompt clients of homegrown outsourcers to hold back spending, which will result in lower business for IT outsourcers including Wipro.
While Wipro’s revenue fell, Tata Consultancy Services Ltd (TCS) earlier reported a 3.8% revenue growth, still its slowest growth in four years. K. Krithivasan, CEO of the country’s largest IT services company, had said clients were delaying decision-making and there were some project ramp-downs. Pallia’s comments on Wednesday echo the same concern.
Wipro’s revenue decline was primarily due to lower business from Europe, its third largest market. Even better business in the Americas could not offset the loss from the region.
Wipro’s dull performance comes a year after the Bengaluru-based IT outsourcer named Pallia its new chief executive. In his first year, Pallia has focused on cutting redundant costs, such as travel and offsites.
Pallia has also identified 50 must-have accounts and deployed ‘account executives’ for its 80 largest clients. The company also won two large deals in his first year as CEO, including a $650 million contract from British insurer Phoenix Group in March, and a $500 million deal from an unnamed US-based communications provider in June last year.
Still, Wipro has a long way to go before it can clock growth. The company added 197 new accounts this year compared with 229 in the previous fiscal. Clients fetching more than $100 million annually were also down by five in the last 12 months.
The management said clients had paused programmes due to the hazy macroeconomic conditions.
“There are large transformation programmes that were ready, in the fray, that were happening, and the clients have decided to pause it,” said Aparna Iyer, chief financial officer.
At least one analyst was cautious of the future.
“Wipro’s FY25 numbers most likely mean there could be some client deferrals in Q1FY26 due to the ongoing trade war,” said Abhishek Pathak, lead analyst for IT services at Motilal Oswal Financial Services.
For the full year, power companies and manufacturers were the cause of much of the decline in Wipro’s business. These companies contribute 17.2%, or $1.8 billion of Wipro’s full-year revenue. Revenue from these companies were down 10.5% on a yearly basis.
In terms of geography, Wipro got 27%, or $2.85 billion, of its revenue from clients in Europe, which was 7.4% lower year-on-year. Even better business in the Americas could not offset the loss from the region.
During the quarter, Wipro reported $2.6 billion in revenue, down 1.24%.Much of this was on account of lower business from healthcare companies. Net profit during the quarter rose 6.4% to $418 million.
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Profitability was another bright spot. Wipro reported 17.1% operating margins, up 100 basis points from the year ago. One basis point is a hundredth of a percentage point.
Wipro’s headcount grew by 732 in FY25 to 233,346, while TCS added 6,433 employees to end the fiscal with 607,979 employees.
The management did not give a hiring target, much like peer TCS, baking in the macroeconomic uncertainty.
“We will have to take it as it comes from a growth perspective, where we have geared ourselves from a plan of onboarding people, especially from the campuses, on a regular basis. But we are also very cognizant that we shouldn’t do anything which is onboard people and not deploy them,” said Saurabh Govil, chief human resources officer.
Headcount determines the demand environment in the IT services sector. More hiring or increased headcount indicates higher demand for tech services whereas a cut in headcount signals lower demand and lower business for software service providers.
Wipro’s earnings were released after the markets closed. On the New York Stock Exchange, Wipro’s shares fell 6.74% to $2.63 as of 6:30pm IST.
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