Wipro Ltd’s share repurchase worth ₹15,000 crore – its largest – failed to cheer investors a day after its announcement as underlying weakness in its business clouded optimism about the buyback.
Shares of the country’s fourth-largest IT services company fell 2.78% to ₹204.35 at the close on the BSE on Friday, off the day’s low of ₹202.60. Much of the concern stemmed from a third straight year of revenue decline. Still, the company announced a buyback of 600 million shares at ₹250 apiece.
Wipro’s annual revenue has shrunk by $756 million from a peak of $11.23 billion in FY23. The decline would have been worse without the $130 million in revenue from three acquired companies.
The revenue that Wipro lost in the past three years exceeds the combined incremental revenue of LTM Ltd (formerly LTIMindtree), Mphasis Ltd, Coforge Ltd and Persistent Systems Ltd in FY25. Wipro ended FY26 with $10.48 billion in revenue, down 0.32% from the preceding year. It ended FY25 and FY24 with revenue declines of 2.7% and 3.8%, respectively.
Experts attributed this weakness to slow capability building and an inability to convert the deal pipeline into actual revenue while an uncertain macroeconomic environment prompted clients to pause tech spending. At the same time, the Bengaluru-based IT services company has been generous to shareholders and willing to acquire companies.
During the past three years, Wipro spent $481 million to buy three companies, which accounted for $130 million in revenue, according to a Mint review of company financials. During this time, Wipro also returned over ₹32,900 crore ($3.55 billion) to shareholders – ₹14,517 crore through buybacks and ₹18,407 crore through dividends.
Simply put, Wipro is buying business through acquisitions and giving money to shareholders through dividends and share buybacks, according to analysts.
“While there is concern about growth, the only acquisition from a competency perspective was Harman Digital Transformation Services (DTS). The other deals were focussed on captive customers or strategic vendor consolidation deals,” said Sushovon Nayak, lead IT analyst at Anand Rathi Institutional Equities.
Late to AI
“Wipro has been late in building AI-led capabilities compared with peers Infosys, HCL Technologies and LTM, which have been more aggressive from a Gen AI perspective, partnering with frontier model labs such as Anthropic and Open AI,” added Nayak. “However, the recent foray into the AI native and business platforms unit (to increase focus on AI capabilities), along with the recently launched Wipro Intelligence, is a step in the right direction.”
Wipro bought Harman DTS, the software services and engineering arm of the Connecticut-based audio product manufacturer, for $375 million in August last year.
At least one brokerage said the company might be losing market share.
“While total booking growth for FY26 has been healthy at 14% YoY and management’s commentary on tech budgets and deal pipelines remains positive, this optimism is not reflected in the Q1FY27 guidance of -2% to 0% (-1.8% organic at the mid-point). This is due to client-specific issues and delays in the ramp-up of large deals. The disconnect between deal bookings and revenue growth suggests AI-led deflation and market share loss,” ICICI Securities analysts Ruchi Mukhija, Aditi Patil and Seema Nayak said in a note dated 17 April.
The company expects to start FY27 on a weak note, with revenue projected at $2.6 billion to $2.65 billion.
A delay in the ramp-up of large deals and slow revenue realization from top clients could weigh-in on the company, according to a second brokerage.
“We model ~1.0% YoY CC (constant currency) revenue growth for FY27E, factoring in a weak start (1QFY27E revenue down ~1.0% QoQ CC) and continued near-term headwinds from ramp-up delays, top client decline, and vertical weakness,” Motilal Oswal Financial Services analysts Abhishek Pathak, Keval Bhagat and Tushar Dhonde said in a note dated 16 April.
Marquee client
Most of the revenue drag came from consumer companies, which make up almost a fifth of the company’s turnover. This was on the back of the loss of a marquee client. Wipro lost $100 million annually from Estee Lauder to peer Accenture Plc, Mint reported on 3 March.
The Motilal Oswal analysts said that “further improvement in execution and a stable conversion of deal TCV (total contract value) to revenue will be key to a constructive view.”
However, external factors have compounded Wipro’s troubles over the past three years.
“Wipro is likely facing higher pricing pressure in application and infrastructure maintenance services where it has a higher share,” said Karan Uppal, lead IT analyst at Phillip Capital. “A slowdown in discretionary spending in the last few years has impacted its consulting practice whereas client-specific issues are posing challenges in the near term. With client losses across client buckets ($100mn+, $50mn+, $20mn+), it appears Wipro is losing market share versus its peers.”
While the market is not convinced about the company’s turnaround plans, the management is confident of converting deal pipelines in the future as Srini Pallia entered his third year as Wipro’s chief executive officer on 7 April.