Wipro’s stock plunged over 4% in early trade following the announcement of its fiscal second-quarter (Q2 FY26) results. The mixed performance has left investors debating whether the decline signals short-term volatility or a deeper structural concern.
Mixed Q2 Performance: Key Takeaways
Wipro reported a modest 1.2% year-on-year (YoY) increase in consolidated net profit, reaching ₹3,246 crore. This fell slightly short of market expectations, and sequentially, profit dipped 2.5% from the previous quarter. Revenue from operations grew 1.8% YoY to ₹22,697 crore. In constant currency terms, revenue from IT Services increased just 0.3% quarter-on-quarter (QoQ), aligning with the higher end of Wipro’s own guidance.
The company issued cautious guidance for Q3 FY26, projecting IT Services revenue growth in a narrow range of -0.5% to +1.5% in constant currency. Meanwhile, operating margins stood at 16.7%, impacted by a one-time $13.1 million provision due to a customer bankruptcy. Excluding this, margins improved slightly to 17.2% YoY.
Silver Lining: Strong Deals and Operational Strength
Despite mixed headline numbers, Wipro delivered impressive deal wins, signaling healthy future revenue visibility. Total deal bookings for Q2 reached $4.7 billion, up 30.9% YoY in constant currency. Large deal bookings, worth $2.85 billion, surged over 90% YoY, reflecting strong multi-year contract inflows.
Management highlighted improving revenue momentum, with three out of four Strategic Market Units (SMUs) showing sequential growth. The Europe and APMEA regions returned to growth, and the voluntary attrition rate eased to 14.9%, boosting operational stability. Wipro also emphasized its AI-first strategy, aiming to leverage next-generation technology to drive long-term growth.
Brokerage Views: Mixed Opinions on Sell or Hold
Brokerages remain divided on Wipro’s outlook:
- Motilal Oswal: Sell – cites flat YoY growth in constant currency and limited margin expansion.
- Jefferies: Underperform – cautious due to muted guidance and execution risks.
- Emkay Global: Reduce – concerns over vendor consolidation and pricing pressures.
- JM Financial: Buy – strong deal inflows provide medium-term growth visibility.
- Nomura: Buy – improving growth prospects, especially in H2 FY26.
- Nirmal Bang: Hold – acknowledges revenue and deal momentum but expects margins to remain range-bound.
Investor Dilemma: Sell or Hold?
For long-term investors, Wipro’s strong deal pipeline and operational stability make a compelling case to hold. Multi-quarter deal conversions, easing attrition, and AI-focused initiatives suggest structural improvements underway. The current dip provides an opportunity to accumulate shares at a more attractive valuation.
Short-term traders, however, face near-term pressure due to muted guidance and sequential profit dips. Investors with low risk tolerance may consider selling to protect capital until clearer growth signals emerge.
Conclusion
Wipro’s Q2 FY26 results highlight a dual reality: weak near-term metrics contrasted by strong future-facing deal wins. While the 4% stock drop reflects immediate concerns over guidance and profit, long-term investors could view it as an entry point to benefit from Wipro’s sizable deal pipeline and growth recovery expected in the second half of FY26. Patience and a focus on strategic execution will be key for investors deciding whether to hold or sell.
