Preview: Will Wipro maintain growth momentum in Q3?

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26 Aug, 2025 12:21

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Investors will closely eye the third-quarter earnings of India's third-largest technology services firm Wipro due Friday to gain insights into how much its turnaround strategy has made progress.

A CNBC-TV18 poll of analysts expects the company's operating profits to rise 5.7 percent to Rs 2,393 crore compared to Rs 2,264 crore in the previous quarter. Revenues are expected to go up to Rs 10,332 crore versus Rs 10,068 crore, an increase of 2.6 percent.

In dollar terms, revenue is expected to rise 2.8 percent to USD 1,677 million from USD 1,631.1 million in the September quarter. This is the midpoint of the company's forecast in the last quarter, which stood at USD 1,660-1,690 million.

If the company meets its guidance, this will be its second quarter of sustained growth and would likely indicate the company is putting behind the problematic two years it faced after 2010, when annual earnings per share growth came in about flat.

Wipro has since initiated a slew of restructuring initiatives, including hiving off its consumer products business in a bid to streamline operations and focus on the IT business.

In the earnings season so far, peers Infosys and HCL Tech have reported stronger-than-expected earnings with dollar revenue growth rising 1.65 percent and 4 percent, respectively. IT companies have benefited from a general pick-up in global IT spending as developed economies recover from global financial crisis.

Also read: HCL Tech Q2 profit, revenue growth beat street

Wipro could also guide for a strong Q4 based on a string of deal wins it has got recently.

Indeed, amid expectations, the Wipro stock, has rallied about 33 percent in the past one year, though the CNX IT index increased even more at 48.2 percent in the same period.

But analysts as yet are divided on whether still-cheaper valuations (compared to similar-size peers) at 18 times FY14 expected EPS of Rs 32 and 15 times FY15 expected EPS of Rs 37 -- along with a potential for further margin expansions -- could lead to further upside in the stock or whether it is too early to tell if the turnaround strategy is firmly entrenched.