Wipro's weak first-quarter forecast overshadows record buyback

By Sai Ishwarbharath B ‌and Haripriya Suresh

BENGALURU, ​April ​16 (Reuters) - Wipro forecast a weak first quarter on Thursday, citing muted demand as its U.S. banking and financial clients curb ‌spending in an uncertain economic environment, sending its New York-listed ⁠shares down 2.4%.

The outlook came alongside a lackluster fourth-quarter report and a record share ‌buyback of up to 150 ‌billion rupees ($1.61 billion) from India's No.4 IT services exporter.

Jefferies said the forecast was the key disappointment, though the buyback size exceeded expectations.

Wipro's ​struggles reflect the strain on India's $315‑billion IT sector as its CEO, two years into the role, grapples with weak demand and client‑specific ⁠setbacks.

"Geopolitical and policy disruptions have become the new normal," CEO Srini Pallia said in the post-earnings press ​meet, adding that clients were increasingly tying spending to measurable outcomes.

Wipro forecast first-quarter revenue of $2.60 billion to $2.65 billion, ranging ​from a 2% sequential decline to ‌flat growth.

The forecast pointed to continued demand uncertainty and delayed deal ramp- ups, StoxBox analyst Sagar Shetty said.

Pallia's two ⁠years at the helm are "difficult to rate" as he took charge in a challenging environment, Centrum Broking analyst Piyush Pandey said, adding that pressures persist.

Larger rival ⁠Tata Consultancy Services last week beat quarterly revenue and profit estimates, easing concerns over ​the impact of AI tools on its core business.

Wipro's consolidated revenue rose 7.7% to 242.36 billion rupees, missing the LSEG-compiled consensus estimate of 243.63 billion rupees, while ‌net profit fell 1.9% to 35.02 billion rupees, slightly below the estimate of 35.07 billion rupees.

Total deal wins ‌stood at $3.5 billion, up from $3.33 billion in the previous quarter, which marked a ⁠six-quarter low, but down from $4 ‌billion a year earlier.

($1 = ​93.2740 Indian rupees)

(Reporting by Sai Ishwarbharath B and Haripriya Suresh in Bengaluru; Editing by Harikrishnan Nair, Dhanya Skariachan and ‌Anil D'Silva)

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