Indian IT services giant Wipro (NYSE:WIT) (NS:WIPR) fell short of revenue estimates for the first quarter, missing analyst expectations by 1% sequentially and 4.9% year-over-year due to declines in key sectors like energy and telecom, said Bank of America (BofA) Global Research in a note on Monday.
For the second quarter, Wipro provided a revenue growth guidance of -1% to +1% quarter-over-quarter (QoQ), below BofA's expectation of 0% to 2% due to phased deal ramp-ups. Deal win value declined 12% year-over-year (YoY), indicating a need for consistent large wins.
Despite the revenue shortfall, Wipro's EBIT margin remained stable at 16.5%, supported by increased utilization and cost management. Capco's consulting business grew 3.4% QoQ. BofA also flagged the company's Generative AI (GenAI) strategy, which focuses on internal system implementation, productivity improvements in managed services contracts, and industry-specific use cases.
The new CEO's approach involves refining the Asia Pacific strategy and returning to a leaner cost structure, aiming for a gradual improvement in growth, according to BofA.
BofA maintains an "Underperform" rating for Wipro, citing concerns about valuation in light of the company's growth prospects and market expectations for a swift turnaround