Wipro Shares Crash 5% after Q4 Earnings Results
Wipro Ltd, one of India’s largest IT companies, witnessed a significant decline in its stock price after releasing its earnings results for the fourth quarter (Q4) of FY25. The shares of the Bengaluru-based company crashed over 5% on Thursday, with investors reacting negatively to the company’s weak Q1 FY26 outlook and tepid revenue growth.
Despite a 26% year-on-year (YoY) net profit growth, Wipro’s stock price took a hit as investors were disappointed with the company’s guidance for the first quarter (Q1) of FY26. The company’s cautious outlook weighed heavily on investor sentiment, leading to a sharp decline in its share price.
Wipro’s Q4 FY25 earnings results showed a net profit of ₹3,367 crore, which was higher than the ₹2,655 crore reported in the same quarter last year. However, the company’s revenue growth was subdued, with a rise of just 3.2% YoY to ₹20,739 crore.
The company’s Q1 FY26 outlook was also a major concern for investors. Wipro guided for a revenue growth of 2-4% YoY, which was lower than the 5-6% growth expected by analysts. The company’s weak guidance led to a sharp decline in its share price, with the stock crashing over 5% to close at ₹544.95 per share on the National Stock Exchange (NSE).
At least 13 brokerages also slashed their price target for Wipro shares after the company’s cautious outlook, according to Bloomberg data. The brokerages, including Macquarie, Citigroup, and Deutsche Bank, reduced their price targets for Wipro shares by up to 10%, citing the company’s weak Q1 FY26 outlook and subdued revenue growth.
Wipro’s earnings results were also impacted by a decline in its operating margin, which fell by 100 basis points to 15.8% YoY. The company’s operating margin was affected by a rise in employee costs and a decline in its IT services segment.
Wipro’s IT services segment, which accounts for the majority of its revenue, reported a decline of 2.4% YoY in Q4 FY25. The segment’s revenue fell to ₹16,315 crore, which was lower than the ₹16,669 crore reported in the same quarter last year.
The company’s other segments, including its digital and analytics business, also reported a decline in revenue. Wipro’s digital and analytics segment reported a revenue decline of 10.4% YoY to ₹1,344 crore, while its engineering services segment reported a revenue decline of 5.6% YoY to ₹1,410 crore.
Wipro’s earnings results were also impacted by a rise in its employee costs. The company’s employee costs rose by 12.1% YoY to ₹7,349 crore, which was higher than the 10.5% YoY rise expected by analysts. The company’s employee costs were affected by a rise in salaries and benefits, as well as an increase in the number of employees.
Despite the decline in its stock price, Wipro’s Q4 FY25 earnings results showed some positive signs. The company’s net profit margin rose by 100 basis points to 16.2% YoY, while its cash generated from operations (CGFO) rose by 15.8% YoY to ₹6,419 crore.
Wipro’s earnings results were also impacted by a decline in its capital expenditure. The company’s capital expenditure fell by 25.4% YoY to ₹1,342 crore, which was lower than the ₹1,800 crore expected by analysts. The decline in Wipro’s capital expenditure was a positive sign for investors, as it indicated that the company was focusing on generating cash and reducing its debt.
In conclusion, Wipro’s Q4 FY25 earnings results were disappointing for investors, with the company’s weak Q1 FY26 outlook and tepid revenue growth weighing heavily on investor sentiment. The company’s shares crashed over 5% after the earnings results were released, with at least 13 brokerages slashing their price target for Wipro shares. Despite the decline in its stock price, Wipro’s Q4 FY25 earnings results showed some positive signs, including a rise in its net profit margin and a decline in its capital expenditure.
Source:
