Wipro (WPRO IN) – Q3FY26 Result Update – Margin resilience continues, Growth acceleration awaited – HOLD
Published on 17 Jan 2026
The revenue growth (+1.4% QoQ CC) was in line with our estimates (+1.5% QoQ CC), the ramp up of Phoenix deal and Harman integration (+0.8%) contributed to Q3 growth. Despite having negative seasonality in Capco, the organic growth (0.6% QoQ CC) was positive and multi-faceted across business units, including Fin. Services. However, the organic growth momentum is less likely to sustain in Q4 due to execution deferment in one of the large deals, especially the NN component. The softness in business is also baked into Q4 organic guidance of -1.5 to +0.5 QoQ CC (our assumption), which translates to two-month inorganic contribution of +1.5% QoQ. Again, the organic guidance comes at the back of improving Capco seasonality in Q4, which is little discouraging. Although 9MFY26 large deals (+77% YoY) and bookings (+25% YoY) have improved, the execution remains a challenge. On the margins front, we expect the full integration of Harman will dilute Service margins in FY27 before it sees integration benefits achieved in FY28E. We are baking in revenue growth of -1.3%/+3.8/4.4% YoY CC, while keeping our Adj. IT Service margin estimates at 17.4%/17.1%/17.5% for FY26E/FY27E/FY28E, respectively. We assign 17x to FY28 EPS for a TP of 260. Retain HOLD.
