Wipro Q1 FY27 Results (NSE: WIPRO)
Signal: Margin expansion
The read
Revenue inflects to +10.6% YoY growth, the strongest in 5 quarters, and EBITDA margin expands 110bps YoY to 22.9% — the first margin expansion after 4 consecutive quarters of contraction — driven by operating leverage on employee costs and subcontracting; however, PAT is flat (+0.6%) as higher D&A, finance cost, and tax provision offset the operating improvement, while other income at 22.6% of PBT (flagged) continues to flatter the bottom line.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹24,478.6 Cr | 10.6% | -73.6% |
| EBIT | ₹480.78 Cr | 4.2% | |
| Net profit | ₹335.2 Cr | 0.6% | |
| EPS | ₹3.2 | 0.6% | |
| EBIT margin | 22.9% |
P&L walk
Revenue grew 10.6% YoY, reversing prior-year contraction; EBITDA margin expanded 110bps YoY to 22.9% as employee cost grew slower than revenue (9.9% vs 10.6%), aided by SG&A leverage; operating leverage is confirmed with EBITDA growth (5.9%) exceeding revenue growth (10.6%) — margin expanded 110bps YoY, while D&A grew 17.3% and finance cost rose 31%, so the leverage came primarily from employee cost and subcontracting efficiencies; other income at 22.6% of PBT inflates PAT; PAT flat at +0.6% YoY due to a higher tax provision.
Key positives
- Revenue growth accelerates to 10.6% YoY, the highest in five quarters, reversing the prior-year contraction trend (Q1FY26: +0.8% YoY).
- EBITDA margin expands 110bps YoY to 22.9% — first YoY expansion after four consecutive quarters of contraction — driven by operating leverage: employee cost grew 9.9% vs revenue 10.6%.
- Consolidated revenue ₹24,478.6 Cr signals the IT services demand recovery is broadening, with subsidiaries (Capco, Aggne) contributing to the >10% growth.
Key concerns
- PAT growth flat at +0.6% YoY as operating profit improvement (+5.9% EBITDA growth) is fully offset by a 31% jump in finance cost and a higher tax provision (up 19% YoY).
- Other income at 22.6% of PBT remains elevated, masking underlying operating leverage; without it, PBT would be lower.
- Standalone PAT fell 22.5% YoY, showing the operating health of the parent is weaker than the group — earnings are concentrated in subsidiaries.
- Finance cost grew 31% YoY, far outpacing revenue growth, pressuring interest coverage (EBIT/finance cost ~1.0x).
Earnings quality: includes non-operating other income
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