Wipro reported Q2 FY27 gross revenue of ₹24,752.7 crore, up 9.1% year-on-year. Yet IT services revenue grew only 0.3% in dollars and 0.6% in constant currency. Net profit actually declined 1.4% to ₹3,200.6 crore. How does revenue grow 9% while the core business barely moves and profit falls?
The answer lies in currency translation, not real demand. The company's convenience translation implies roughly ₹95.7 per US dollar. A weaker rupee lifts rupee-reported revenue by high single digits even when dollar revenue is flat. Constant-currency growth of 0.6% shows the business itself is nearly stagnant. The 9% headline figure is mostly accounting, not operational performance.
Segment and geography data for Q2 isn't available yet, but the pattern is clear. The gap between rupee growth and constant-currency growth points to currency as the primary driver, not a shift in revenue mix. Acquisitions may add a little, but they're already baked into the IT services figure.
The Harman Digital Transformation Solutions (DTS) acquisition, which closed in December 2025, added about 0.7–0.8% to quarterly revenue growth in Q4 FY26. It likely contributes to the YoY figure, meaning organic growth is even weaker than the 0.6% headline. Without the segment breakdown, we can't quantify how much each geography or service line contributed, but the overall story is one of flat underlying demand. Other +1
Revenue growth was mostly currency translation, so it added little real profit. Margins were slightly lower year-on-year. IT services margin stood at 16.5%, versus 16.7% a year earlier. But that year-ago figure included a ₹116.5 crore customer-bankruptcy provision. Excluding it, the margin was 17.2%, making the underlying decline about 0.7 percentage points.
Flat dollar revenue gave no operating leverage. Costs rose with wages and delivery, so profit didn't grow with reported revenue. Quarter-on-quarter, profit fell about 4.5% even though margin improved 0.5 percentage points. Items outside IT services operations, such as other income, finance costs and tax, likely explain this gap.
Interestingly, EPS rose 4.2% against a 1.4% profit decline. That implies the share count fell roughly 5%, probably due to the earlier ₹15,000 crore buyback. Fewer shares mean higher EPS even with flat profit.
Total bookings dropped 22.9% to $2,595 million. This is a sharp reversal from Q1, when large deal bookings hit $1.63 billion across 13 deals.
Several factors explain the drop. First, base effect: Q1 was unusually strong, so Q2 faced a high comparison. Large deals are inherently lumpy. Second, management has cited slower discretionary spending, longer decision cycles, and some large deals taking longer to ramp up. Third, demand is shifting toward cost optimization and vendor consolidation, which can delay decisions. Transcript
The impact on future revenue visibility is real. Q2 bookings roughly matched revenue at about 1.0x, down from 1.29x in Q1. If bookings stay weak for several quarters, growth later in FY27 and into FY28 would come under pressure. The 13 large deals from Q1 should still ramp, providing some visibility, but the pipeline needs to recover.
Q2 detail on costs isn't available, but Q1 provides the best guide. IT services margin hit a 15-quarter low of 16.0% in Q1, reflecting higher employee costs, lower utilisation, and investments for future growth.
Q2's 0.5 percentage point sequential improvement recovers less than half of Q1's 130 basis point drop. That suggests wage-hike and transition costs are still being absorbed. Attrition was stable at 13.8%, implying limited pressure to raise pay further, but utilisation and headcount data for Q2 are missing.
Wipro is making a clear trade-off: investing ahead of revenue. Management has committed to a new AI-native business unit and $500 million to Wipro Ventures. These investments weigh on margins now but are meant to drive growth later. The risk is if large deal bookings stay low, Wipro bears the costs without new revenue ramping to cover them. Other +1
The contrast with peers is stark. Tech Mahindra reported Q1 FY27 revenue growth of 17.7% in rupees and 6.6% in constant currency, with net profit up 28.4%. Its EBIT margin has risen for several quarters, from 9.6% in Q2 FY25 to 14.4% in Q1 FY27. Margin gains on a low base produce large profit growth.
TCS and HCLTech have reported Q2 FY27 results. TCS grew 2.8% in constant currency with an operating margin of 24.0% and total contract value of $9.6 billion. HCLTech grew 2.6% in constant currency with net income up 21.2% and an EBIT margin of 18.2%. Infosys reports on October 23.
The sector is facing weak demand, but Wipro is underperforming even in that context.
Wipro's Q3 guidance for IT services revenue is -1.5% to +0.5% in constant currency, effectively flat. Management expects BFSI segment improvement during Q2, while technology and communications show momentum. AI transformation projects could create new demand, though near-term spending remains cautious.
The sharp decline in large deal bookings is the key risk. If the pipeline doesn't recover, sustaining revenue growth will become harder. Tech Mahindra's steady deal flow and margin recovery show what's possible in this environment. Wipro needs to convert its healthy pipeline into actual wins and demonstrate that its AI and consulting investments can deliver growth without sacrificing margins.
For now, the story is one of currency-driven headline growth, flat underlying demand, and margin pressure. The 9% revenue increase looks impressive on paper, but the 0.6% constant-currency growth and 1.4% profit decline tell the real story.
