Wipro (WIT) Q2 FY2027 results: margin recovers, bookings slump

Wipro (WIT) Q2 FY2027 results show margins recovering while bookings weakened sharply. The company released its results for fiscal 2027's second quarter (July-September 2026) on October 15, 2026, with a press release and an earnings call [1]. IT services revenue came in slightly above the midpoint of company guidance, and the operating margin rose from 16.0% to 16.5% [1][2][3]. The Americas business was mixed: Americas 2 margins recovered, while healthcare clients cut spending faster.

Three questions mattered going into the quarter: whether large deals would turn into revenue, whether margins would recover after the salary increase, and whether contraction among US banking and healthcare clients would stop. Taken together, profitability improved and cash generation stayed strong, but large-deal bookings fell to $674 million. Revenue in the second half now depends on whether delayed large deals get signed.

Wipro is an IT services company headquartered in Bengaluru, India, and almost all of its revenue comes from IT services [4]. It provides consulting, application development, cloud and AI services to enterprises in the Americas, Europe and other regions. Clients pay by headcount or fixed price, and multi-year large deals are recognized as revenue quarter by quarter.

Revenue met guidance, but large-deal bookings hit a seven-quarter low

Second-quarter revenue met guidance even as bookings fell sharply. Wipro had guided Q2 revenue of $2.574 billion to $2.627 billion [3]. Actual IT services revenue was $2.6115 billion, flat sequentially in constant currency [1][5]. Q2 included the first full quarter of Mindsprint revenue, while Q1 included only one month, and the company did not disclose organic growth [6]. Meeting guidance therefore does not yet show that large deals are producing organic growth.

Bookings were clearly weaker than in Q1. Large-deal bookings (contracts of at least $30 million each) were $674 million, down 58.6% sequentially in constant currency. Total bookings were $2.595 billion, down 22.9% [1]. In Q1 the two figures were $1.626 billion and $3.37 billion [2]. Total bookings were about 0.99 times revenue, so new contracts did not fully replace the revenue recognized in the quarter. Management said two confirmed orders slipped into Q3 because paperwork was not signed on time [6]. Management gave a similar explanation in Q1, and two consecutive quarters of slippage weaken the case that bookings are converting into revenue.

Wipro guided Q3 revenue of $2.571 billion to $2.625 billion, or -1.5% to +0.5% sequentially in constant currency, mainly reflecting seasonal furloughs [1][6]. Management said signing the delayed deals would help Q4 revenue [6]. That still needs to be confirmed in the January 2027 results.

Americas 2 margin recovered while healthcare declined faster

Wipro's two Americas units moved in different directions this quarter. Americas 2, which serves US banking and energy, manufacturing and resources clients, posted revenue of INR 63.194 billion, up 1.7% sequentially. Its segment margin rose from 15.9% to about 17.8% [1][5]. Management said large energy and manufacturing deals and a previously delayed banking mega-deal were ramping up [6]. Company-wide banking, financial services and insurance revenue grew 1.0% sequentially in constant currency, after a 1.2% decline in Q1 [5]. The earlier explanation that ramp-up costs come before revenue is starting to hold.

Americas 1 and healthcare remained under pressure. Americas 1 revenue was INR 84.985 billion, down 2.1% sequentially in constant currency, and its margin fell from about 19.4% to about 18.8% [1][5]. Healthcare revenue fell 3.8% sequentially in constant currency, a steeper decline than the 2.6% fall in Q1 [5]. Management attributed this to US healthcare policy changes and tighter spending by payers, and said the seasonal lift in Q3 would be weaker than in prior years [6]. The Americas as a whole have not yet stopped shrinking.

IT services margin returned to 16.5%, with the currency effect unquantified

The margin rose 0.5 percentage points, supported by better workforce efficiency. IT services segment profit in Q2 was INR 40.726 billion, a 16.5% margin, 0.2 percentage points lower than a year earlier [1]. Employee benefits expense fell from about 60.1% to about 59.8% of total revenue, and subcontracting costs fell from about 11.7% to about 11.3% [7]. Headcount at quarter end was 236,328, down 6,716 from the prior quarter [5]. The company said it paused campus hiring in the first half and will resume it in the second half [6].

The quality of the recovery still needs to be confirmed. The CFO attributed the improvement to operational gains and rupee depreciation, partly offset by continued investment, without giving amounts [6]. Unallocated items widened from INR -0.787 billion to INR -2.137 billion, and the reason was not disclosed [1]. The company aims to return to a 17% to 17.5% margin band but gave no timeline [6].

Conclusion

Wipro's Q2 FY2027 results improve the view of profit conversion and weaken the view of growth. The salary-increase impact is starting to be absorbed, and the Americas 2 large-deal ramp is producing real profit. Operating cash flow was 165.8% of net income, showing strong cash conversion. Net income fell 4.7% sequentially, mainly because other income declined after the share buyback [1]. Bookings fell to a seven-quarter low, and revenue still includes acquisition contributions. The key evidence in Q3 will be whether the delayed deals are signed, whether healthcare stabilizes, and whether the margin holds at 16.5%.

Sources

[1] Wipro press release 2026-10-15 · results for quarter ended September 30, 2026, 2026-10-15, 6-K, https://www.wipro.com/content/dam/nexus/en/investor/quarterly-results/2026-2027/q2fy27/press-release-q2fy27.pdf [2] WIT 6-K filed 2026-07-22 · Q1 FY27 results highlights, 2026-07-22, 6-K, https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001123799&type=6-K&dateb=&owner=include&count=40 [3] WIT 6-K filed 2026-07-22 · outlook for the quarter ending September 30, 2026, 2026-07-22, 6-K, https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001123799&type=6-K&dateb=&owner=include&count=40 [4] WIT 20-F filed 2026-06-02 · IT Services clients and AI-Native unit, 2026-06-02, 20-F, https://www.sec.gov/Archives/edgar/data/1123799/000119312526253514/ [5] Wipro analyst datasheet 2026-10-15 · Q2 FY27, 2026-10-15, 6-K, https://www.wipro.com/content/dam/nexus/en/investor/quarterly-results/2026-2027/q2fy27/datasheet-q2fy27.pdf [6] Wipro Q2 FY27 earnings call 2026-10-15 · transcript, 2026-10-15, earnings-call, https://www.fool.com/earnings/call-transcripts/2026/10/15/wipro-wit-q2-2027-earnings-call-transcript/ [7] Wipro Regulation 33 results 2026-10-15 · consolidated Ind AS statement Q2 FY27, 2026-10-15, 6-K, https://www.wipro.com/content/dam/nexus/en/investor/quarterly-results/2026-2027/q2fy27/regulation-33-financial-results-q2fy27.pdf