Wipro ADRs fall 6% as third-quarter earnings decline and deal activity declines

Wipro’s ADRs fell nearly 6% on the New York Stock Exchange after the IT services company reported its December quarter results, with investors reacting to weaker year-on-year earnings growth and subdued deal momentum despite improving margins and strong cash generation.US-listed American Depositary Receipts fell after Wipro posted a 7% year-on-year decline in consolidated net profit to Rs 3,119 crore for the third quarter. However, revenue showed steady growth, rising 6% year-on-year to Rs 23,556 crore, supported by sequential growth in its core IT services business.

Adjusted for the one-off impact related to changes in labor laws, net income stood at Rs 3,360 crore, reflecting a sequential increase of 3.6% and a growth of 0.3% year-on-year, indicating that underlying profitability remained stable despite weak demand in certain markets.

Revenue from the company’s IT services segment came in at $2.64 billion, up 1.2% quarter-over-quarter and marginally higher at 0.2% year-over-year. At constant exchange rates, sales rose 1.4% sequentially but fell 1.2% year-on-year, indicating continued price pressures and slower discretionary spending, especially in developed markets.

Operationally, Wipro delivered strong margin performance. IT services operating margin increased to 17.6%, representing a sequential improvement of 90 basis points and an increase of 10 basis points year-on-year. The improvement was due to tighter cost control, better capacity utilization and execution discipline, which partially offset the moderate revenue growth.

Deal activity remained a key focus for investors. Total contract bookings for the quarter were $3.3 billion, down 5.7% year over year at constant exchange rates. Major deal volume was weaker, with bookings of $871 million, reflecting an 8% year-over-year decline, highlighting cautious client spending and longer decision cycles.

The board has declared an interim dividend of Rs 6 per share, with January 27 as the record date. The dividend is expected to be paid on or before February 14, reinforcing the company’s commitment to shareholder returns even in a mixed demand environment. Management maintained a cautious but steady view. For the March 2026 quarter, Wipro forecast IT services revenue in the range of $2.64 billion to $2.69 billion, implying flat to 2% sequential growth on a constant currency basis.

Chief Executive Officer Srini Pallia said the company has achieved broad-based growth in line with internal expectations, noting that artificial intelligence is increasingly emerging as a differentiator. He highlighted the increasing adoption of AI-enabled platforms, scaling AI-driven delivery through internal frameworks and expanding Wipro’s global innovation network.