Wipro Q3 EBIT Margin Hits 17.6%, Beats Estimates as AI Demand Grows
Wipro’s Q3FY26 EBIT-to-sales rose to 17.6%, 30bps above consensus, while Q4FY26 revenue guidance is +1.0% QoQ mid-point with organic growth expected to decline 0.5%. CEO Srini Pallia said that as clients shift from AI test deployments to large-scale projects, demand for Indian IT services is strengthening.
1. Growing AI-Driven Demand for Indian IT Services
Wipro CEO Srini Pallia highlighted a significant uptick in enterprise spending on large-scale artificial intelligence deployments, moving beyond pilot projects toward full production rollouts. He noted that global clients are accelerating contract negotiations for AI-enabled offerings, particularly in financial services, manufacturing and retail sectors. Pallia cited a 25% increase in AI-related deal inquiries over the past two quarters and expects this trend to underpin double-digit revenue growth from AI services in FY27.
2. Q3FY26 Earnings Beat but Q4 Growth Guidance Disappoints
In Q3FY26, Wipro delivered adjusted earnings per share that surpassed consensus estimates, driven by margin-enhancement initiatives such as a higher offshore revenue mix and an increased share of fixed-price contracts. The company reported an EBIT-to-sales ratio of 17.6%, 30 basis points above analyst forecasts. However, management’s Q4 guidance for sequential revenue growth of just 1.0% at the mid-point—and an organic decline of 0.5%—suggests near-term headwinds in discretionary IT spending and a cautious outlook from corporate clients.