Wipro Ltd’s September-quarter (Q2FY27) performance and Q3FY27 guidance indicate that the tier-1 IT company’s underperformance versus peers is likely to continue in FY27, constraining its turnaround. Wipro’s IT services revenue was flat sequentially, with constant-currency (CC) growth of 0.0%, better than consensus expectations that had been lowered to a 0.7% decline.
Growth was led by the consumer vertical, while healthcare remained a pain point. The healthcare vertical continues to face pressure from US policy changes and lower discretionary spending, although some seasonal recovery is likely in Q3. Wipro has guided for weak sequential CC revenue growth of -1.5% to +0.5% in Q3, factoring in furloughs and fewer working days, as it did last year.
Faster conversion of deal wins could help Wipro, but only if contracts are closed on time. The total contract value (TCV) of deal wins in Q2FY27 fell 22.9% sequentially to $2.6 billion, the lowest in Wipro’s history, according to PL Capital.
Large-deal bookings dropped 58.6% to $674 million. Wipro signed nine large deals, including an AI-led transformation engagement with a global financial institution. For context, Q1FY27 saw $3.37 billion in total bookings, including $1.63 billion in large deals. Management attributed part of the decline to two contracts that could not be signed on time and slipped into the December quarter, adding that the pipeline remained very robust.
But not everyone is convinced by this explanation. “Management flagged two deals slipping to Q3 on paperwork delays with no loss of the deals, but the Q1 commentary had made the same slippage argument and that conversion has not materialised,” said Nirmal Bang Institutional Equities. The brokerage noted that Wipro’s large-deal wins were the weakest in at least two years. With TCV-to-revenue conversion already the weakest among peers, the shrinking order book removes one leg of the growth argument that was still standing.