Wipro: Riding the Gen AI Wave, But at What Cost?

Gen AI is Picking Up Speed

Wipro’s Gen AI strategy is gathering steam. From enhancing delivery to nudging developers toward deeper usage, Wipro is actively embedding generative capabilities into the way it works. There are significant efficiency gains in applications, followed by cybersecurity. Gen AI adoption is increasing in delivery. Developers are being nudged to increase usage of Gen AI.

There’s also a shift in how large deals are being structured. Wipro is incorporating Gen AI-driven cost efficiencies in large deal bids. That’s not just about winning contracts—it’s about reshaping how those contracts are fulfilled. The aim is clear: make AI work harder, so people don’t have to.

This transformation places Wipro among the front-runners in Generative AI in IT services, especially among Indian IT companies.

The Shadow Behind the Shine

While the benefits of Gen AI are evident, there’s a growing concern on the revenue front. The rate of revenue deflation during renewals is increasing on account of Gen AI. More clients are asking: if AI can automate the work, shouldn’t the price go down?

To counter this, measures are being taken to offset revenue headwinds from Gen AI adoption in SDLC.

Despite the innovations, the rating remains SELL and fair value is retained at ₹230 on roll-over—offering a cautious view for anyone tracking Wipro share price or considering Wipro stock for the short to medium term.

What’s Going Right

What should investors take away from this?

• Margins could improve in the short term as automation brings down operational costs.

• Stronger positioning in areas like AI in cybersecurity and consulting may drive better client stickiness.

• Innovation is ongoing, but emerging technologies like Agentic AI may take time to impact Wipro earnings meaningfully.

What’s Pulling It Down

So, what does this mean for investors?

• Revenue deflation during contract renewals could limit near-term growth for Wipro.

• Even with Gen AI-led efficiencies, pricing pressure remains a key challenge.

• This adds caution to the short-term outlook for Wipro share price, especially among IT stocks in India navigating Gen AI adoption.

AI Adoption and Impact Overview

The bottom line for investors:

• Operational efficiency is improving across multiple business lines, which may support cost savings.

• Gen AI is becoming a core part of Wipro’s delivery engine, positioning the company as more future-ready.

• However, pricing pressure during renewals could dilute some of the gains from these efficiencies.

Holding Position

This suggests a cautious near-term outlook for Wipro investors, especially those looking for upside in Indian tech stocks influenced by AI adoption.

Looking Ahead

Gen AI is more than a buzzword—it’s a strategic lever. Productivity, cost savings, and service delivery improvements are already being realised, particularly in cybersecurity and application development. The push toward a consulting-led mindset opens up new frontiers. Agentic AI is also seen as the next big productivity saver.

However, the challenge lies in maintaining top-line growth in the face of rising client expectations for AI-driven cost savings. The growing rate of revenue deflation during renewals is a red flag.

The balance between future-ready innovation and present-day profitability is delicate. As Gen AI continues to evolve, so will the narrative for Wipro—and for those tracking the direction of AI-driven IT stocks in India, this is one to watch closely.