Wipro margin slips as costs outpace revenue growth
Revenue grew 10.59% year on year, but higher interest costs and a 22.57% other-income contribution to pre-tax profit limited earnings growth.
Filed 16 Jul 2026, 15:49 IST · after market close · Wipro Ltd (WIPRO)
Key takeaways
- Consolidated operating margin fell 1.33 percentage points sequentially to 18.93% as expenses grew 2.68% against 1.00% revenue growth.
- Net profit rose only 0.59% year on year despite 10.59% revenue growth, as interest costs increased 31.04% and the tax rate rose 0.92 percentage points.
- The stock's initial 0.98% decline was modest against its 5.09% median absolute move after the past eight results.
Price around the results
Sequential growth came with operating deleverage
Wipro's consolidated revenue increased 1.00% sequentially, but expenses rose 2.68%, pulling operating margin down 1.33 percentage points. Operating profit consequently declined 5.62% even as revenue edged higher. The quarter's 18.93% margin was 0.25 percentage points above the 18.68% median for 14 reported IT peers, placing Wipro around the middle of that group rather than near its upper end.
Year-on-year revenue growth did not reach net profit
Revenue grew 10.59% year on year while expenses increased 10.86%, resulting in a 0.19 percentage-point margin decline. Interest expense rose 31.04% and depreciation increased 17.35%, which weighed on pre-tax profit growth despite operating profit rising 9.45%. Other income accounted for 22.57% of pre-tax profit, so reported earnings also carried a material non-operating contribution; the 0.92 percentage-point increase in the tax rate further limited net-profit growth to 0.59%.
Margin recovery from Q3 was not sustained
The 18.93% operating margin remained above Q3FY26's 18.24%, but fell from 20.26% in Q4FY26. This leaves the recent margin trend volatile rather than a continuing recovery: margins improved in Q4 before reversing in Q1FY27. Sequentially, interest expense also rose 27.75%, while the tax rate fell 1.98 percentage points and partly cushioned the decline in net profit.
Initial market reaction was mild for Wipro
The shares fell 0.98% on the first trading day after the results, with an initial gap down of 2.36%. That reaction was smaller than Wipro's 5.09% median absolute move across the past eight results, during which the stock rose three times and fell five times. The results were filed after market close on 16 July 2026.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹24,479 cr | ₹24,236 cr | +1.00% | +10.59% |
| Other income | ₹979 cr | ₹857 cr | +14.19% | -8.68% |
| Expenses | ₹19,845 cr | ₹19,327 cr | +2.68% | +10.86% |
| Operating profit | ₹4,633 cr | ₹4,909 cr | -5.62% | +9.45% |
| Operating margin (%) | 18.93% | 20.26% | — | — |
| Interest | ₹473 cr | ₹370 cr | +27.75% | +31.04% |
| Depreciation | ₹804 cr | ₹729 cr | +10.42% | +17.35% |
| Profit before tax | ₹4,335 cr | ₹4,668 cr | -7.14% | +1.79% |
| Tax | ₹978 cr | ₹1,146 cr | -14.64% | +6.12% |
| Net profit | ₹3,356 cr | ₹3,522 cr | -4.69% | +0.59% |
| EPS (₹) | ₹3.20 | ₹3.34 | -4.19% | +0.63% |
Operating margin of 18.93% compares with a Information Technology sector median of 18.68% across 14 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.98% | -2.07% |
| Next session | -0.77% | — |
| 5 sessions | -0.35% | +0.92% |
Volume on the results session was 1.01× its 20-day average.
What to watch
- Whether operating margin recovers from 18.93% after the 1.33 percentage-point sequential decline.
- Whether expenses continue to grow faster than revenue after the 2.68% versus 1.00% sequential gap.
- Whether interest expense moderates from its 31.04% year-on-year increase and reduces the reliance on other income, which was 22.57% of pre-tax profit.