Information technology firm Wipro’s Chairman Rishad Premji said on July 16 that clients across industries have become more acclimatised to operating in an uncertain environment, leading to cautious optimism around discretionary spend in pockets as the broader outlook remains subdued.
“Customers are more and more getting acclimatised to living in a world that is more uncertain. So, while their focus has shifted towards cost consolidation and vendor consolidation, we are also seeing the emergence in some industries of short-term thinking on discretionary spending coming back in pockets,” Premji said while speaking at the company’s annual general meeting for FY25.
Wipro chairman highlighted that although the environment has not deteriorated further, neither has it improved. “It has not gotten any worse, but has not gotten significantly better at the moment,” he said, implying that clients remain cautious to large-scale, new investments in technology.
Premji’s views were echoed by his company’s peers, Accenture and Tata Consultancy Services (TCS), in their most recent quarterly earnings update.
Nevertheless, the cautious rebound in discretionary spending offers hope for IT services firms that have continued to see delays in decision-making and tighter tech budgets amid macro-economic uncertainty over the last two fiscal.
Wipro’s revenue declined 2.3 percent in constant currency (CC) terms for FY25. In the previous fiscal year, Wipro's CC revenue growth had decreased by 4.4 percent.
The company also reduced its guided revenue in the range of -1.5 percent to -3.5 percent for the first quarter of the financial year 2026 ending June 30, 2025 (Q1FY26). This is a deterioration from the earlier guidance of -1 percent to +1 percent in the previous quarter.
CEO’s Comments
Wipro CEO Srinivas Pallia addressed investor questions on the issue, and said clients continue to prioritise productivity and simplification initiatives even as some discretionary projects have started to reappear.
"We see a strong focus on cost and vendor consolidation, but at the same time, clients are cautiously evaluating select discretionary investments that can help them prepare for future growth," Pallia added.
Earlier, addressing a press conference after Q4FY25 earnings, Pallia had said that uncertainties in the IT sector have dramatically increased from FY25 to FY26, mainly due to tariffs announced by Donald Trump.
“I don't have a crystal ball that tells me how it (macroeconomic issues) goes… going from the context of FY25-26, the uncertainties have dramatically increased,” Pallia had said earlier this year.
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