In This Article:
By Sai Ishwarbharath B and Haripriya Suresh
BENGALURU (Reuters) -Wipro on Wednesday forecast a sequential decline in first-quarter revenue, joining bigger rival TCS in flagging demand uncertainties across India's $283 billion IT sector as shifting tariffs upend global industries and client decision-making.
U.S.-listed shares of India's fourth-largest IT services firm fell 5% at $2.71 in premarket trading after the company said it expects revenue in the April–June quarter to fall between 1.5% and 3.5%.
Wipro and other Indian IT companies have boosted revenue in the past decades by deploying engineers for tasks from app development to cybersecurity, but growth has slowed in recent years as more clients establish local operations to handle tech work in-house.
"Going from FY25 to FY26, the uncertainties have dramatically increased," chief executive CEO Srini Pallia said in a post-earnings conference, adding that the automotive and industrial segments were "really impacted" due to the U.S. tariff-related flip-flops.
Trump’s 25% automotive import tariffs took effect on April 3, causing shock waves across the industry since supplies come from all over the world.
Wipro, which counts Volkswagen and Yamaha as clients, saw revenue from its energy resources and manufacturing segment fall 7% in the quarter.
Industry leader TCS missed fourth-quarter earnings estimates last week and warned about clients delaying decision-making in discretionary projects.
Wipro's consolidated revenue rose 1.3% to 225.04 billion rupees ($2.63 billion) in the quarter-ended March, but missed analyst estimates of 226.21 billion rupees, as per data compiled by LSEG. Net profit rose 26% to 35.7 billion rupees.
Mumbai-based brokerage firm Dolat Capital had expected Wipro's June-quarter revenue to range from a 1% drop to 1% growth, said analyst Rahul Jain.
Revenue in three out of the company's five verticals fell during the quarter, while deal wins stood at $4 billion, compared to $3.61 billion last year.
Wipro said its deal pipeline across U.S. and Europe was expected to be strong in the medium term despite the macro overhang.
India's second-largest IT firm Infosys reports results on Thursday while third-largest firm HCLTech will report next week.
($1 = 85.6410 Indian rupees)
(Reporting by Sai Ishwarbharath B; Editing by Nivedita Bhattacharjee)