Wipro Ltd (WIT) Q2 2025 Earnings Call Highlights: Strong Bookings and Margin Expansion Amid ...

Wipro Ltd, one of India's leading technology services and consulting companies, has released its Q2 2025 earnings call results, showcasing a robust performance in bookings and margin expansion despite facing challenges in certain sectors. The company's strong business momentum and strategic initiatives have positioned Wipro favorably for future growth.

Robust Growth in Bookings

Wipro's Q2 2025 earnings call highlighted significant growth in bookings, with total bookings rising to $3.56 billion, a substantial increase of 84% from the previous quarter. This uptick in bookings is particularly notable, as it underscores the company's ability to secure and execute large deals. The strong deal momentum is a key driver of Wipro's growth strategy, as it positions the company well to capture new business opportunities in a competitive market.

Key Statistics:

• Total Bookings: $3.56 billion, up 84% from Q1 FY25
• Large Deal Bookings: $1.49 billion, up from $1.15 billion in Q1 FY25

Expansion of Operating Margins

Wipro's operating margins have also shown significant improvement, expanding by 35 basis points sequentially and by 71 basis points year-over-year to reach 16.8%. This expansion in margins is crucial, as it reflects the company's ability to manage costs effectively and sustain performance despite slower revenue growth. Improved margins indicate that Wipro is focusing on operational efficiency and cost optimization, which is essential for long-term sustainability.

Key Statistics:

• Operating Margin: 16.8%, up 35 basis points sequentially and 71 basis points year-over-year
• Revenue from Operations: $22,301.6 crore, a slight decline of 0.95% from Q2 FY24

Challenges in Europe and Energy & Utilities

Despite the robust performance, Wipro faced challenges in Europe and the Energy & Utilities sector. The company reported a slight sequential decline of 0.1% in Europe due to diminished demand and specific client-related issues. Additionally, the Energy & Utilities sector experienced a sequential drop of 3.7%, highlighting persistent difficulties in this area. These challenges underscore the importance of diversification and strategic focus on high-growth sectors.

Key Statistics:

• Europe Revenue Decline: 0.1% sequentially
• Energy & Utilities Sector Drop: 3.7% sequentially

CEO's Insights

Wipro's CEO, Srini Pallia, provided insights into the company's performance and future strategies. He highlighted the strong execution in Q2, which met the company's expectations for revenue growth, bookings, and margins. Pallia emphasized the expansion of top accounts, with large deal bookings surpassing $1 billion once again. He also mentioned the momentum maintained by Capco and the company's continued investment in AI-powered solutions.

CEO's Quotes:

• "Based on strong execution in Q2, we met our expectations for revenue growth, bookings, and margins."
• "We continued to expand our top accounts, large deal bookings surpassed $1 Bn once again, and Capco maintained its momentum for another consecutive quarter."
• "We grew in three out of four markets, as well as, in BFSI, consumer, technology, and communications sectors. We will continue to invest in our clients, our strategic priorities, and building a strong AI powered Wipro."

CFO's Insights

Aparna Iyer, Wipro's CFO, discussed the strategies to mitigate wage increases and revenue challenges. She highlighted traditional methods such as improving utilization, offshoring, general and administrative optimization, and synergy benefits from acquisitions, all of which contribute to improved margins. Iyer also emphasized the importance of vendor consolidation and cost reduction within the Energy & Utilities sector, aiming to convert these prospects into tangible wins to enhance performance.

CFO's Quotes:

• "Our Q3 (FY25) revenue is expected to be affected by seasonal furloughs and fewer working days in this quarter."
• "We are focusing on leveraging the company's strengths to outmaneuver competitors and capture new business."

Future Guidance

Wipro has provided guidance for the third quarter, suggesting a possible revenue decrease of up to 2%, attributed to seasonal furloughs and a reduction in working days. Despite this, the company remains optimistic about its future prospects, particularly in the Americas and Middle East Africa (MEA) regions.

Future Guidance:

• Q3 Revenue Guidance: $2,607 million to $2,660 million, implying a sequential guidance of (-)2.0% to 0.0% in constant currency terms.

Share Price Performance

Wipro’s shares ended trading on the BSE at Rs 528.70 per share, marking a slight decline of 0.65% compared to the previous day’s closing price. Despite this slight dip, the stock has gained over 10% year-to-date, outperforming the Nifty 50, which has risen by 13% in the same period.

Share Price Performance:

• Closing Price: Rs 528.70 per share
• Year-to-Date Gain: Over 10%

Market Reactions

Wipro's Q2 earnings have drawn mixed reactions from brokerages. While strong deal momentum and solid margin performance provided optimism, muted revenue growth and weak near-term guidance weighed on investor sentiment. Morgan Stanley and Jefferies have projected a downside of 5.3% and 12% for Wipro shares, respectively. However, Nomura and Macquarie expect an upside of 28.8% and 26.8%, respectively.

Market Reactions:

• Brokerage Views:
  • Morgan Stanley: Underweight rating with a target price of Rs 500.
  • Jefferies: Underperform call with a target of Rs 465.
  • Nomura: Buy call with a target of Rs 680.
  • Macquarie: Outperform call with a target of Rs 670.

Conclusion

Wipro’s Q2 2025 earnings call highlights the company's robust performance in bookings and margin expansion, despite facing headwinds in Europe and the Energy & Utilities sector. The strong deal momentum and strategic initiatives position Wipro favorably for future growth. While the company faces challenges, its diversified approach and focus on high-growth sectors make it an attractive player in the technology services and consulting industry.

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References:

1. Bajaj Broking
2. Finance Yahoo
3. Seeking Alpha
4. Money Control
5. Times of India