India’s IT services sector continues to navigate cautious client spending, but Wipro’s latest earnings suggest selective demand pockets are proving resilient. The Bengaluru-based software exporter reported stronger-than-expected revenue for the December quarter, helped by growth in its Americas business—particularly in communications, healthcare, and consumer services—offering investors a more nuanced picture of an industry often painted with broad pessimism.

Revenue Beats Expectations as Americas Deliver

Wipro reported consolidated third-quarter revenue of 235.56 billion rupees ($2.59 billion), a 5.54% increase from a year earlier and above market expectations of 233.91 billion rupees, according to LSEG data. The upside was driven largely by strength in the Americas, where demand in communications-led engagements offset softness seen elsewhere in discretionary technology spending.

The performance stands out in a sector where enterprises have largely delayed non-essential digital projects. Wipro’s results reinforce a growing theme across Indian IT: while broad-based acceleration remains elusive, mission-critical programs and sector-specific opportunities continue to move forward.

Core Segments Show Uneven but Improving Demand

Banking and financial services, Wipro’s largest vertical accounting for more than a third of revenue, posted a modest 1.6% increase in sales, signaling early signs of stabilization after several subdued quarters. Although growth remains muted, the pickup suggests financial clients are selectively resuming technology investments tied to compliance, efficiency, and core system modernization.

The communications, healthcare, and consumer segments—grouped under the Americas business—were the key growth drivers. These industries tend to prioritize operational continuity and customer engagement, making them more resilient during periods of macro uncertainty. For Wipro, this diversification has helped cushion the impact of delayed discretionary spending in other geographies.

Profit Pressured by One-Off Costs

Despite the revenue beat, profitability lagged expectations. Net profit declined 7% year over year to 31.19 billion rupees, missing analysts’ forecasts of 33.52 billion rupees. Management attributed much of the shortfall to a one-time charge of 3 billion rupees related to India’s new labour codes, which increased employee-related provisions.

While the adjustment weighed on quarterly earnings, investors are likely to treat it as non-recurring. Excluding the charge, margins would have painted a more stable picture, aligning with peers that have emphasized cost discipline and selective hiring.

Deal Bookings Reflect Cautious Optimism

Total deal bookings came in at $3.34 billion, down sequentially from $4.69 billion but higher than the $3.5 billion recorded a year ago. The mixed trend highlights ongoing caution among global clients, even as pipelines slowly rebuild.

Notably, Wipro’s outlook for the March quarter points to revenue growth ranging from flat to 2% sequentially, implying sales between $2.64 billion and $2.69 billion. While hardly a breakout forecast, it signals management’s confidence that demand will at least hold steady amid a challenging backdrop.

Industry Context: Signs of a Broader Thaw

Wipro’s results follow upbeat revenue prints earlier this week from larger peers including Tata Consultancy Services, HCLTech, and Infosys. Collectively, these companies have pointed to improving deal traction and essential-tech demand, with TCS expressing confidence in a “good calendar year 2026.”

For investors, the takeaway is not a full-cycle recovery but a gradual normalization. The sector’s defensive characteristics, combined with selective growth areas, are beginning to reassert themselves.

What to Watch Going Forward

The coming quarters will test whether pockets of strength can broaden into more sustained momentum. Key indicators include deal conversion rates, margin stability after one-off costs fade, and whether BFSI spending accelerates further. If global macro conditions stabilize, Wipro’s Americas-led performance could prove an early signal of a wider IT spending rebound.