India's Wipro forecast disappoints, stock drops

The stock dropped around 3%, making it the worst performer on the IT index and a major drag on the broader market, News.Az reports, citing Reuters.

Wipro said it expects revenue for the June quarter to range from a 2% sequential decline to flat growth, citing subdued demand, particularly from US banking and financial services clients cutting back spending amid economic uncertainty.

The cautious outlook follows a disappointing fourth quarter, where the company missed analyst expectations for both revenue and profit.

Analysts say the forecast highlights persistent challenges in organic growth. Some estimates suggest Wipro could face multiple consecutive years of declining revenue if the trend continues.

Despite reporting deal wins worth $3.5 billion in the January–March period, growth has yet to materialise, as longer-duration contracts delay revenue conversion.

The company is also dealing with rising costs, including salary increases, integration of lower-margin acquisitions and pricing pressure on large deals.

These factors are expected to continue weighing on profitability in the near term.

Wipro’s shares have fallen more than 20% so far this year, making it the worst-performing stock on the IT index.

The decline reflects broader concerns about demand uncertainty and the disruptive impact of artificial intelligence on traditional IT services, as companies rethink spending and shift toward new technologies.

The results underscore the challenges facing legacy IT firms as they navigate a rapidly evolving tech landscape shaped by AI, cost pressures and cautious global clients.