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Mumbai: Shares of Wipro, India’s fourth-largest IT services company, plunged nearly 7 percent on Monday morning after its December quarter (Q3 FY26) earnings and cautious outlook disappointed investors. The sharp fall reflected concerns over weak profit growth, lower deal wins, and muted revenue guidance for the next quarter. The stock also underperformed peers such as TCS and Infosys.

Profit declines despite revenue growth

Wipro reported a 7 percent year-on-year fall in consolidated net profit to Rs 3,119 crore for the October–December quarter. The decline was mainly due to higher provisions related to labour costs following the implementation of the new labour code. This added pressure on the company’s bottom line.

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Revenue from operations rose 5.5 percent year-on-year to Rs 23,556 crore, compared with Rs 22,319 crore in the same quarter last year. While revenue growth remained positive, it was not strong enough to offset cost pressures, leading to weaker overall earnings.

Margins improve slightly but stay under pressure

On the operating front, Wipro saw some improvement. Operating margin expanded by 0.9 percentage points on a quarter-on-quarter basis to 17.6 percent. However, margins remained under pressure due to higher employee-related expenses and a challenging demand environment, limiting the benefit of cost controls.

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Deal wins remain weak

Deal activity continued to be a key concern. Wipro reported total deal bookings of USD 3.3 billion in Q3 FY26. This was lower than USD 4.6 billion recorded in the same quarter last year and also below USD 3.5 billion in the previous quarter. The weak deal pipeline raised concerns about future revenue visibility and growth momentum.

Weak guidance adds to concerns

Investor sentiment was further hit by Wipro’s cautious outlook for the March quarter. The company guided for IT services revenue growth of 0 percent to 2 percent sequentially in constant currency terms. It expects revenue in the range of USD 2,635 million to USD 2,688 million for the next quarter, signalling continued uncertainty in client spending.

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Investor reaction

The combination of falling profit, low deal wins, and weak guidance led to heavy selling in the stock. Investors remain cautious as Wipro navigates cost pressures and slower demand, while peers appear to be in a relatively stronger position.

Disclaimer: This article is for informational purposes only and is based on publicly available data. It does not constitute investment advice. Readers should consult financial advisors before making investment decisions.