Wipro Ltd (NSE: WIPRO) Q2 2025 Earnings Call dated Oct. 16, 2025
Corporate Participants:
Abhishek Jain — Vice President, Corporate Treasurer and Head of Investor Relations
Srinivas Pallia — Chief Executive Officer and Managing Director
Aparna C. Iyer — Chief Financial Officer
Hari Shetty — Chief Strategist and Technology Officer
Saurabh Govil — Chief Human Resources Officer
Analysts:
Nitin Padmanabhan — Analyst
Kumar Rakesh — Analyst
Ravi Menon — Analyst
Sudheer Guntupalli — Analyst
Sandeep Shah — Analyst
Dipesh Mehta — Analyst
Girish Pai — Analyst
Vibhor Singhal — Analyst
Abhishek Kumar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Wipro Limited Q2 FY ’26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Abhishek Jain, Vice President, Corporate Treasurer and Head of Investor Relations. Thank you, and over to you.
Abhishek Jain — Vice President, Corporate Treasurer and Head of Investor Relations
Yeah. Thank you, Yashashri. Warm welcome to our Q2 FY ’26 earnings call. We will begin the call with the business highlights and overview by Srinivas Pallia, our Chief Executive Officer and Managing Director, followed by updates on financial overview by our CFO, Aparna Iyer. We also have CHRO, Saurabh Govil; and our Chief Strategist and Technology Officer, Hari Shetty, on this call. Afterwards, the operator will open the bridge for Q&A with our management team.
Before Srini starts, let me draw your attention to the fact that during this call, we may make certain forward-looking statements within the meaning of Private Securities Litigation Reform Act 1995. These statements are based on management’s current expectations and are associated with uncertainties and risks, which may cause the actual results to differ materially from those expected. The uncertainties and risk factors are explained in our detailed filings with the SEC. Wipro does not undertake any obligation to update the forward-looking statements to reflect events and circumstances after the date of filing. The conference call will be archived and a transcript will be available on our website.
With that, I would like to turn over the call to Srini. Srini, over to you.
Srinivas Pallia — Chief Executive Officer and Managing Director
Thanks, Abhishek. Good evening, and thank you all for joining us today. In quarter two, our IT services revenue stood at $2.6 billion with sequential growth of 0.3% in constant currency. Our adjusted operating margin for the quarter was 17.2%. This is within the narrow band we had previously indicated, and it’s an improvement of 0.4% compared to the same period last year.
Let me now walk you through some of the highlights and key movements for this quarter. Within our markets, three of the four SMUs reported sequential growth. Americas 1 delivered sequential and year-on-year growth, driven by strong performance in healthcare, technology, and communications sectors. Americas 2 saw a decline this quarter. However, we remain confident about future growth in this region as some of the deals we won in the first half are now beginning to ramp up. Europe returned to sequential growth in quarter two after several quarters led by BFSI. The Phoenix deal is set to start generating revenue from quarter three, providing further momentum. APMEA growth was fueled by strong results in India, Australia, and Southeast Asia. Capco grew both sequentially and year-on-year with momentum coming from newer markets like LatAm and APMEA.
Turning to our industry sectors now. We continue to see momentum in BFSI with clients prioritizing cost optimization, vendor consolidation, legacy modernization, and scaled deployment of Agentic AI. Tariff uncertainties continue to impact the consumer, energy, and manufacturing sectors, leading customers to reevaluate their supply chains. In Technology and Communications, the focus is on accelerating AI adoption and developing industry-specific solutions with cost optimization remaining central. Healthcare, especially in the US, is undergoing structural changes. We are actively supporting clients through this transition, and the sector remains one of our strong performers.
Coming to deal wins and pipeline. This quarter, we closed $4.7 billion in total contract value and signed 13 large deals. Much of this demand is driven by vendor consolidations, AI-powered transformations, and consulting-led programs, areas where our strategy is truly making an impact. Our order bookings this quarter also include two mega deals, one with a healthcare client and another in BFSI. While a significant portion of these two deals are renewals, they are important for deepening our presence and unlocking future growth in these accounts.
We are seeing strong momentum in Europe, and I want to highlight two examples that bring this to life. First, Wipro has formed a strategic multiyear partnership with a leading UK financial company to modernize their business. We are using our WeGA AI platform and a new center of excellence to drive this change. We are helping improve customer experiences and streamlining back office operations. We are also bringing advanced AI to business and technology streams like HR, mortgages, financial crime prevention and, of course, IT. This will optimize workflows and support real-time decisions for our clients. Above all, it will help become more resilient for the future.
In my second example, we are partnering with a leading European distribution and logistics company on a multiyear transformation of their operations and IT. By leveraging our expertise in operating model design, process standardization, and technology modernization, we are helping them move to a unified digital core, making their operations more efficient and unlocking long-term growth with AI and digital tools.
Now, I am excited to introduce Wipro Intelligence, our unified suite of AI-powered platforms, solutions, and transformative offerings. With Wipro Intelligence, we are enabling our clients to scale with confidence and lead in an AI-first world. It strengthens our consulting-led approach, driving innovation and delivering measurable outcomes for our clients. In fact, Wipro Intelligence brings together advanced capabilities across delivery and industry platforms. Our delivery platforms are already accelerating work from software development, infrastructure and cloud to business process operations. And on the industry side, we have reimagined core business processes and developed more than 200 AI agents and platforms spanning multiple sectors.
As AI continues to evolve, we are helping clients experiment, adapt, and scale rapidly by working closely with our partners, ventures, and leading research institutions. Wipro Intelligence is about proof, not just promise. We embed productivity gains, assure business outcomes, and build in responsible AI guardrails.
Let me share three examples of our solutions. One, AutoCortex for our automotive sector, WealthAI for BFSI, and Payer AI for healthcare. Each of them is already making a tangible difference for our clients and also earned strong recommendations from industry analysts. This momentum gives us real confidence for the future.
With that, let me move on to our forecast for the next quarter. In quarter three, we are projecting sequential IT services revenue growth of minus 0.5% to plus 1.5% in constant currency. Our priority remains converting our strong backlog into revenue while maintaining operational discipline to ensure profitable growth.
And with that, I’ll hand it over to Aparna, who will take you through the financials in more detail. Over to you, Aparna.
Aparna C. Iyer — Chief Financial Officer
Thank you, Srini. Good evening, everybody. Let me share with you an update on the financial performance for the quarter ended 30 September 2025. After that, we can open up the call for Q&A.
Our IT services revenue for Q2 grew 0.3% sequentially in constant currency terms and 0.7% sequentially in reported currency. This is well within our guided range. Revenue declined 2.6% year-on-year in constant currency terms. Our operating margins for Q2 at 16.7% contracted 60 basis points quarter-on-quarter and 10 basis points year-on-year. Our operating margins were impacted by a one-off charge taken on account of a client bankruptcy event. Adjusted for this, our margins were at 17.2%, which is an expansion of 40 basis points year-on-year and is in a narrow band. Our quarter one margins was at 17.3%. As we invest for growth, we will continue to see pressure on our margins as we make investments, but our endeavor will be to maintain the margins in a narrow band.
Let me also give you some color on our strategic market unit performance. All growth numbers that I shared will be in constant currency. Americas 1 sustained its growth momentum, growing 0.5% sequentially and grew 5% on a year-on-year basis. Americas 2 declined 2% sequentially and 5% on a year-on-year basis. Europe grew 1.4% sequentially, declined 10.2% on a year-on-year basis. APMEA grew 3.1% sequentially and 2.6% on a year-on-year basis. BFSI grew 2.2% sequentially and declined 4% year-on-year. Healthcare declined 0.2% sequentially and grew 3.9% year-on-year. Consumer declined 1.7% sequentially and 7.4% year-on-year. Technology and Communication grew 0.8% sequentially, declining 1.7% year-on-year. EMR declined 1.5% sequentially and 0.5% year-on-year. Capco continues to perform well, growing 3.2% on a year-on-year basis.
Let me share some other key financial metrics. Our net income and EPS grew 1% year-on-year in this quarter. Our operating cash flows continue to remain higher than our net income and stood at 104% of net income for Q2. Our gross cash, including investments, were at — was at $6 billion for the quarter. In quarter two, our net income — net other income declined 14% year-on-year. Our accounting yield for the average investments held in India was at 7.1%. Our ETR was at 23.8% for quarter two ’26 versus 24.6% in the same quarter in the last year.
In terms of guidance, to reiterate what Srini shared, we expect the revenues from our IT services business to be in the range of $2.59 billion to $2.64 billion. This translates to a sequential guidance of minus 0.5% to a plus 1.5% in constant currency terms. The Harman Digital Transformation Solutions acquisition that we had announced in Q2 is expected to close through the course of the quarter. Our guidance number does not factor any revenues from this acquisition.
Thank you. With that, operator, you can open it up for Q&A.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] We’ll take our first question from the line of Nitin Padmanabhan from Investec. Please go ahead.
Nitin Padmanabhan
Yeah, hi. Good evening. Thanks for the opportunity. So the first is, just wanted your thoughts on the deal to revenue conversion. So I think we have had very strong deal wins, large consolidation wins. Do you think BFSI, considering you had those large consolidation wins, should start flowing through this year itself — those that you closed last quarter? And how should we think about — how are you thinking about growth as you sort of go forward next year? Do you think this alone can sort of continue to sort of help maintain a positive momentum on revenue?
Aparna C. Iyer
So I’ll take this one, Nitin. Obviously, we had several large deal wins in the BFSI space. We had one in Q4, which is expected to ramp up in Q3 and is factored as a part of our guidance. We had a few large deals in Q1 in BFSI, all of which have a reasonable element of new in it, and we expect them to kind of ramp up over the next few quarters. This may take about six to eight quarters to fully ramp up on the new.
In terms of the large deal win that we had in the BFSI space in Q2, we — it’s largely renewal, right? So it is a mix of both renewal, renewal plus expansion, and then net new. The net new deal is likely to ramp up, like I said, in Q3. The ones with expansion will take a few quarters for them to ramp up. And if you look at, like I said, the one that we did in Q2 is largely renewal.
Now, to your other question on BFSI growth, yes, we’ve grown sequentially. That’s the first dot in the plot. And we will have to sustain that momentum. We are quite confident. Q3 looks positive. And from there on, we will have to build on it, like I said, as the large deals ramp up, that will go up. A lot of the growth was actually led by Europe and APMEA within the BFSI space. We expect Americas to join in, in that growth as those large deals pick up.
Nitin Padmanabhan
Got it. Got it. Just one last one on margins. I sort of missed the margin walk that you sort of provided. But how should we broadly think about margins going forward? Do you think this quarter, the transition costs will start kicking in on a going-forward basis or we’ve already had some impact from that? Just some color on margins, how should we think about it?
Aparna C. Iyer
So when we started quarter two, we had alluded to headwinds as some of these large deals start to ramp up. Those headwinds will continue as some of these large deals ramp up in phase. In quarter two, the walk, while we are not quantifying the exact impact, we had two positives. One was certainly the rupee depreciation and the dollar weakness which was a positive. Second, operationally, too, we have continued to expand in terms of our utilization has improved. Our attrition has come down. We also drove better profitability in our fixed price programs. All in all, I think operations and forex were positive. Yes, we continue to make certain investments for our growth in terms of these large deals, and that is also a part of our margins. Some of it is there in Q2, and there will be more as some of these large deals continue to ramp up.
So quarter three is also a seasonally weaker quarter in terms of furlough lower working days, etc. That’s the headwind we are starting quarter three with. We have several initiatives in place. If you look at it, our utilization has been better. We’ve also driven better profitability in our fixed price program. Even our SG&A, we are continuing to optimize. These three levers will continue. And we don’t guide for a margin, but our endeavor will be to be in a narrow band of our adjusted operating margins of 17.2%. The notable one-off was the provision for bad and doubtful debt provision that we took in terms of the insolvency, which is 50 basis points. So adjusted for that, our operating margins is 17.2%, which is in a narrow band of Q1 performance.
Nitin Padmanabhan
Perfect. That’s helpful. Thank you so much. I’ll fall back in the queue. All the very best.
Aparna C. Iyer
Thank you, Nitin.
Operator
Next question is from the line of Kumar Rakesh from BNP Paribas. Please go ahead.
Kumar Rakesh
Hey. Hi. Good evening and thank you for taking my question. My first question was around the growth side. So over the last couple of quarters, we have seen the deal wins to have materially picked up. Total bookings have been touching close to about $5 billion. Your large deals also have been quite high. You also spoke about Phoenix deal will start ramping up in the third quarter. So all these momentums are something which is behind us and should be pushing us towards growth. But at the midpoint, what we are guiding is only marginal improvement in growth. So what exactly is something which we are looking at from the headwind perspective? Because last year, during December quarter, we had reported marginal growth. So the furlough shouldn’t be so big that it eats into all the incremental tailwind which we have?
Aparna C. Iyer
So, Rakesh, when we guide, we guide based on the visibility that we have at the start of the quarter. We — you should look at the midpoint and then we guide in a range that is both — that’s why we have a plus 1.5% on the top end, and we have a minus 0.5% to accommodate volatilities that we could see during the quarter. Yes, there is a ramp-up of the large deal wins. And you are right, that is giving us a positive momentum. If you look at it after several quarters, we have guided where the midpoint is in a positive. That we believe is the first step. And as we convert more of these large deals into revenue, this momentum should improve.
Kumar Rakesh
Thanks, Aparna. My second question was around margins. So on — today, you spoke about that you would intend to keep the margin in a narrow band around 17.2%. And you had earlier also spoken about some of these large deals would be margin dilutive and there would be some impact of that. So how should we tie up these two comments?
Aparna C. Iyer
Yeah. So like I said, we don’t guide for a range on the margin, right? Our endeavor has to be to keep it in the band of 17% to 17.5% that we had earlier alluded to. Obviously, if you look at it in terms of the investments for growth, there will be organically, we will continue to win some of these large deal wins. There is a vendor consolidation-led pipeline, which are quite intently fought, right? So one is also looking to be on the right side of some of those deal wins, which will also come with pressure on margins, at least as they start, right? But over a period of time, as we realize the productivity that we have offered to our clients and that starts to kick in, the margins then tend to improve.
We are driving several other initiatives still to offset some of these investments that we are making. I also want you to note that the Harman DTS acquisition is not a part of these numbers. When that comes, that will also be an investment that we will be making for our growth. And that will come with a 60 basis points dilution that we have already spoken of at the point of announcing the acquisition. These are things that we are — these are the headwinds we have to the margins. We have initiatives in play that we will use to offset some of these pressures. And that’s how we — that’s why we are saying at least for quarter three, we are holding it in a narrow band, and then we will see from there how we take those margins.
Kumar Rakesh
Got it. Thanks a lot, Aparna.
Operator
Thank you. We’ll take our next question from the line of Ravi Menon from Macquarie. Please go ahead.
Ravi Menon
Hi. Thank you for the opportunity. You are now growing year-on-year on an organic basis in line with the peers. So do you think this can sustain or it can even improve from here?
Aparna C. Iyer
Ravi, can you repeat your question?
Ravi Menon
I was saying that now you’re growing year-on-year basis, you’re actually growing in line with the peer group on an organic basis. So do you think that can sustain or can you even improve beyond that?
Aparna C. Iyer
Yeah. Srini, you want to take it?
Srinivas Pallia
So, Ravi, Srini here. As far as we are concerned, at this point in time, we’re given a quarter three guidance like Aparna talked about, the midpoint is positive. Second point is some of the deals that we have won on the first half, some of them we’ll have to start executing and each of them have their own rhythm in terms of the ramp — when the ramp-ups will happen, it varies from client to client. Our focus right now is to execute some of the deal wins that we have. And also, we have a very robust pipeline into second half. Our focus is to convert those deals into bookings, which will again translate to revenues going into the future. So from that perspective, Ravi, the main focus for us is to execute both in terms of the deal wins and also win the deals.
Ravi Menon
Thanks, Srini. And going into Q3, other than seasonality, are there any specific factors that you think are headwinds to revenue?
Srinivas Pallia
No, not really.
Ravi Menon
Thanks so much. Best luck.
Operator
Thank you.
Aparna C. Iyer
Thank you.
Operator
We will take our next question from the line of Sudheer Guntupalli from Kotak Mahindra AMC. Please go ahead.
Sudheer Guntupalli
Hi, Srini. Hi, Aparna. So I just wanted some clarity on your response to one of the earlier questions that you said a large part of it is renewal. So are you talking about any specific large deal within BFSI or are you talking about the overall deal wins that we had this quarter?
Srinivas Pallia
So, Sudheer, as far as quarter two deal wins are concerned, the two mega deals that I talked about, one is in the healthcare sector, other one is in the BFSI sector. Sudheer, I hope that clarifies.
Sudheer Guntupalli
Yeah, yeah, Srini, that’s fine. So I was asking Aparna’s response to a prior question that it is largely a renewal. So you were referring specifically to the BFSI deal, right, not — you are not characterizing the overall deal wins that you had this quarter. So this quarter — what I’m trying to understand is, if you look at the deal wins this quarter, again for the second consecutive quarter, it was very strong. So I wanted to understand what is the mix of renewal and new within the overall space, not specific to that particular deal?
Srinivas Pallia
Yeah. Sure. Sudheer, I think if you look at the kind of deal flows we had in the first half, it’s a combination of the three types of deals. One is, like you rightly called out, there are renewals where you actually get to work in those accounts and find an opportunities to bring in growth. Second are renewals with extension of the pipeline, wherein the extensions like Aparna talked about, will take its time in the next six to eight months. And the third piece is net new deals that we have, which we will execute immediately. And the two deals that I called out in Europe are the net new deals, Sudheer.
Sudheer Guntupalli
Okay, sir. Fair enough. Thank you.
Operator
Thank you. Next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead.
Sandeep Shah
Yeah, my question has been answered. Thanks. Hello?
Abhishek Jain
Yashashri, you will have to move to the next participant.
Operator
Thank you. The next question is from the line of Dipesh Mehta from Emkay Global. Please go ahead.
Dipesh Mehta
Yeah, thanks for the opportunity. Two questions. First, I just want to understand whether from net new portion perspective, are we seeing any change compared to, let’s say, past trend in H1 because we have very strong deal booking. So any change in terms of net new portion, if you can give some qualitative sense, if not possible, give quantitative sense, but qualitatively, if you can give some sense?
Second question is, whether we are witnessing any delay in this deal ramp up? What we have signed in last six months, whether those deals are ramping up as scheduled or we are witnessing some challenges there?
Second question is about, we earlier faced some client-specific challenges, particularly in Europe BFSI. As we speak, are we seeing, let’s say, most of those client-specific challenges are behind and we can see normal trajectory of growth based on the deal intake and pipeline entering into H2?
And last question is about the vertical. If I look, let’s say, even quarter two, the way we report our vertical mix, three out of five is still showing sequential decline. So by when you expect relatively more broad-based growth, considering very strong deal intake what we observed in H1? If you can provide some color there? Thanks.
Aparna C. Iyer
Yeah. So I’ll take a few questions and then Srini, you can also add in. From a net new standpoint, we had — in our large deal bookings for the first half, is it better or worse compared to the past? I would say for the first half, our net new bookings have been fairly good. If you look at quarter two, we had two net new deals, six renewals and the others are a combination of renewal plus expansion, right?
In terms of whether these deals are ramping up on time and whether we are seeing any delay, I’m not — I don’t think there is any delay in the ramp up. They’re pretty much right now on course to ramp up as planned. So there is no delay or deferral or challenges that we are facing on that.
In terms of the Europe, whether that client-specific issue is behind us, yes, in some sense, the client-specific issue that we had called out earlier is behind us. You should see the trajectory of Europe to continue to improve. We will, obviously, have to sustain the win momentum that we’ve had in the last two, three quarters, even into the next few. As you know, we continue to operate in a very competitive environment, which means that we have to be on the right side of all the vendor consolidation deals for us to be able to sustain that momentum. That’s what I would like to call out, Manik [Phonetic].
Srinivas Pallia
So, Dipesh, in the context of the sector questions that you asked for, if I look at it, of the five sectors that we have, I think where we see the impact of tariff is mostly on the consumer and energy manufacturing sectors. And these are the two sectors which have degrown sequentially as well as on a year-on-year basis. Now, for us, what we are looking for in these two sectors are what kind of deals that we can play proactively with the clients, especially because of the challenges that they’re facing on the cost side, they’re also facing challenges on the supply chain side, and we are having conversations with them. Otherwise, the other three sectors, I think, Dipesh, we’re looking good.
Dipesh Mehta
Understand. Thank you.
Operator
Thank you. We’ll take our next question from the line of Girish Pai from BOB Capital Markets. Please go ahead.
Girish Pai
Yeah, thanks for the opportunity. I had a few questions. Just on the renewal deal side, are the clients asking for greater level of savings now compared to the past when such renewals happened, considering that you are using AI? And what are they doing with the savings, if at all, they’re getting them? Are they kind of plowing that back into new work? And are you getting that work?
Srinivas Pallia
So, Girish, if you look at broader industry trend that we are seeing, Girish, is clients across industry segments and across the markets that we are in are clearly looking for cost optimization and that is also driving to some extent vendor consolidation.
As far as the cost optimization are concerned, clearly, the clients are looking at aspects of — in addition to cost, speed and also the efficiency through AI. And we see that as an opportunity for us. And if you look at the way we see the opportunities are, of course, on the run and operate side, which includes your application support and maintenance, infrastructure and business process services, where we infuse AI, helping the clients bring in efficiency, productivity, velocity.
The second part is build and transform, which is our software development life cycle, product development life cycle, package implementation. Here, there are multiple tools that are available, and we are using our Wipro Intelligence WeGA platform to actually bring in those productivity benefits for our clients.
And as far as run and operate, we are using WINGS as a platform to bring the productivity and efficiency. Now, wherever the clients are able to get this efficiency and productivity, they’re actually investing in new — especially around the business innovation, leveraging AI and the aspects of AI advisory, data architecture, and also the platforms — some of the platforms that we have built and also solutions, the industry-specific platforms and solutions that we have built is also creating a positive impact for us with the clients. Just to name AutoCortex in automotive, Payer AI in healthcare, WealthAI in BFSI. In fact, some of these, we have already started implementing for the clients and clients are seeing the benefit. We also have some of the industry analysts talking about these industry-specific AI solutions as well, Girish. So it’s a combination of all this that we see as an opportunity for us.
Girish Pai
Okay. My second question is regarding potential liabilities that vendors like you face because of AI work that leads to hallucinations and there could be some damages that clients may probably have to bear. And there seems to be quite a few cybersecurity incidents that have happened with certain clients and certain vendors, Indian vendors. So how do you ensure that you don’t get hit by any of these? I mean, do you have water tight contracts where you don’t bear any costs attached to these, the hallucinations because of any AI contracts that you’re executing or cybersecurity contracts that you’re executing?
Hari Shetty
Hey, Girish, this is Hari Shetty here. And again, glad to be on the call today. A couple of key things, and I think you bring up a very valid point in terms of your question. And one of our strengths in terms of our Wipro Intelligence platform is the responsible AI guardrails that we have actually built into the platform. And probably one of the best implementations of how AI can be responsibly implemented, and that is what actually differentiates us from a Wipro Intelligence perspective. And these capabilities go into both of the platforms that Srini talked about, whether it is WeGA or WINGS. And that gives us the confidence that we can actually deliver the promise of what we are talking about from an AI perspective, as well as make sure some of the guardrails that you talked about are taken care of. Obviously, some of this will also translate into contractual commitments on both sides. And again, from a risk management perspective, we take care of those controls as well.
Girish Pai
Okay. Just last question on H1B. I know probably it’s been beaten to death. Do you foresee any higher pressures on subcontractor costs or on-site utilization going down because you need to maintain on-site bench now because you can’t bring in as many H1B workers, H1B employees from India as you used to, especially if wages go up in the sense that they’re talking about moving away from a lottery system? So how do you kind of foresee that?
Saurabh Govil
Girish, Saurabh here. As you know, a large part of our workforce in the US is localized. So first of all, we don’t see a supply issue from an H1B perspective. More than 80% people are localized, and we are looking at 250-odd H1Bs in the past four, five years. So we have been progressively reducing our dependence on H1Bs. So either on subcontractors or on otherwise, we don’t see an impact. We have been building our centers in the US, and we’ll continue to grow with them based on the demand scenario.
Girish Pai
Thanks.
Operator
Thank you. We’ll take our next question from the line of Vibhor Singhal from Nuvama. Please go ahead.
Vibhor Singhal
Yeah, hi. Thanks for taking my question and congrats on continuous solid deal wins. Srini, my question was regarding the BFSI segment. You mentioned that amongst the five verticals, manufacturing and retail will continue to probably face challenges. But in the BFSI vertical, we have a very interesting mix in which Capco continues to do well. We have the Phoenix deal ramp up maybe next quarter, but at the same time, we were facing challenges in the European BFSI. So putting all this together, how do you see the BFSI sector playing out for us over the next, let’s say, two to three quarters?
Srinivas Pallia
Sure, Vibhor. Maybe I will answer this in a [Technical Issues]
Operator
I’m sorry, sir.
Srinivas Pallia
Sure, Vibhor. Maybe –. Yeah, sorry. Yeah. Sorry, Vibhor. Maybe I’ll answer this question in a little bit more detail, if that’s okay with you. If you look at our BFSI sector, we reported a sequential growth of 2%, also by absorbing near-term impact taken for the mega deals that we signed in quarter one. That’s number one.
Second is the growth for us in BFSI, like I said, is — was led by Europe and APMEA. And both these SMUs, if you noticed, have reported high single-digit sequential growth. Also in the BFSI segment, the order booking continues to be robust. And the same — the point I made to Girish and Dipesh in terms of the kind of deals that we have, the clients are obviously rebalancing. And also, in the BFSI sector, the clients are modernizing a lot of their core in addition to vendor consolidation and efficiencies provided through AI. And also, if you look at Capco, Vibhor, we saw Capco demonstrating both sequential and year-on-year growth for us, which Aparna talked about.
So now if you look at from a — specifically, if I have to double-click on BFSI, banking and payments continues to be our large domains. Also the capital markets, right, some of our global top accounts and anchor accounts, they are showing positive growth. And the most important is, I talked about the platforms, industry platforms, the wealth and asset management is really getting a traction for us. We are also in this segment has a lot of conversations around how we can advise our clients on the AI side. That’s something that we are helping the customers.
Vibhor Singhal
Right. So a lot of, I would say — I mean, traction that we are seeing in multiple parts. Capco, as you said, right, should continue to grow. So overall, as the outlook for the sector, we are looking at a good decent one in the next coming quarters as well. Would that be something [Phonetic] to say?
Srinivas Pallia
Yeah, Vibhor, if you look at my pipeline, right, obviously, BFSI’s pipeline is very strong. So from that perspective, I would say, the positive momentum that we see in BFSI. Also, like Aparna talked about, the Phoenix deal will start executing from this quarter onwards. So net-net, I agree with the point you made, Vibhor, BFSI continue — we see in the positive light.
Vibhor Singhal
Perfect. Perfect. That’s great to hear. Just to double click on the same manner on the healthcare sector. I know not as large as BFSI, but a lot of our peers have been talking about challenges in the healthcare sector because of the Big Beautiful Bill that was introduced by the Trump administration. So any color on that? How do we see this vertical playing out over the next two to three quarters?
Srinivas Pallia
Yeah. So, Vibhor, if you look at traditionally, healthcare has been a strong sector for us. And even in the last quarter, we did show a year-on-year growth. But you’re right, there are certain headwinds in this sector because the sector is going through structural changes. So number one, the good news is that, one of the mega deals that I talked about is from this sector. Second, if you look at the companies, they are adapting to the whole policy changes that are happening. And I think that will drive more cost takeouts, more modernization and so on and so forth for our clients.
Second, also, if you look at the healthcare companies, specifically payers, they’re also trying to accelerate and transform their contact centers so that they can improve their conversations with the members. And that’s another thing that we see as a traction for us. And also, a couple of areas, like some of the — our clients are looking for real-time claim processing, for example, or trying to look at how can we bring in more efficiency in pre-authorization, how do we bring in more enhanced transparency, right, in the context of the structural change. So all these are opportunities for us. And I think we continue to be strategic technology partners for some of the Tier 1 healthcare payers. And I think we continue to stay focused on that.
Vibhor Singhal
Got it. Got it. Great to hear. Just one last question, if I may squeeze in, either you or maybe Aparna can answer on the headcount. We saw a decent addition in the headcount in this quarter. What is the kind of outlook that we’re looking for in terms of headcount addition over the next, let’s say, two to three quarters with the deal ramp up and all, do we see this number maybe inching up a bit or do you think it might stabilize around the current levels?
Srinivas Pallia
So if I look at the — if you look at the key people indices in this quarter, net headcount has gone up, onboarded freshers from college, utilization has gone up. And based on the demand, which is a high, a very strong bookings in H1, I think depending on the — as we convert to revenue, we’ll continue to hire both laterally as well as from campus.
Vibhor Singhal
Got it, got it. Thanks, Srini. Thank you so much for taking my questions and wish you all the best.
Operator
Thank you. Next question is from the line of Abhishek Kumar from JM Financial. Please go ahead.
Abhishek Kumar
Yeah, hi. Good evening. Thanks for the opportunity. I have two questions. First on — so we talked about three kind of deal wins, right, net new, scope expansion, and just plain renewal. So net new, we understand will add to incremental revenue. In the other two types of deals, are we seeing overall book of business for those deals growing, especially in renewal and also in renewal plus scope expansion? Or the deflation, which is there in renewal is kind of offsetting the new scope that we are getting from those deals? Any color on that, please?
Aparna C. Iyer
So you are right, net new is fully new. So that will add to the revenues directly. In terms of just renewal, is there a deflationary pressure? Like I said, every deal, every time there is a product renewal, there is a productivity that gets passed on. And we typically tend to take on more new projects, more new spend that the client initiates. We’ve spoken about how some of this productivity is put back into prioritized spends around AI, AI adoption, and we are playing a huge role in that.
So in some sense, in the renewal plus expansion, there is a reasonable scope expansion, and therefore, there is an increase in the bookings or the revenue value that is expected. In a full-fledged renewal, is there a compression? I wouldn’t call it a compression, but this is just a standard productivity that gets passed on. It’s very typical to what we’ve seen in renewal deals over the last few years.
Abhishek Kumar
Okay. Just a follow-up on this one and then I have a second one. I was asking this because Q2, there have been renewal deals. And even if there is new scope, I mean, would you agree that there is a timing difference between the new scope increase versus the deflation that we see near-term? So does that mean that hits you in second half?
Aparna C. Iyer
Yes. So therefore, what happens is, yes, there is a timing difference, there is a productivity that gets passed on. The way the deals are configured and structured typically have a certain timing and pacing. And like Srini said, each deal is very different. So are there timing differences that could really impact in the short-term and play out differently in the long-term? That is correct.
Abhishek Kumar
Okay. My second question is on the impact of the bankruptcy on your top line. Did we see any impact on 2Q revenue or we are expected to see anything in the 3Q revenue?
Aparna C. Iyer
No, nothing. No, there was no impact on the revenues. We’ve actually made a provision for bad and doubtful debt. You will see that in our G&A spend of expected credit loss numbers going up, and we have made a disclosure to that effect as well. This has no impact on the revenue growth in Q2.
Abhishek Kumar
Okay. That’s all from my side. Thank you and all the rest.
Aparna C. Iyer
Thank you.
Operator
Thank you. We’ll take our next question from the line of Nitin Padmanabhan from Investec. Please go ahead.
Nitin Padmanabhan
Yeah, hi. Thank you for the opportunity again. Earlier, you had called out some large SAP implementation projects being pushed out, pauses by clients and so on and so forth when the tariff-led uncertainty started. Considering some time has passed, are you seeing some of these clients conversations beginning on trying to get these things back? That is the first question. I have three more actually.
Srinivas Pallia
So, Nitin, specific to the comment you made in the context of what we said, there was — in one quarter, we had — we did talk about one of the transformation programs that came to an end. That particular client still is going through the difficulties of tariff, unless and until that piece of the tariff is clear to them, they would — they may not want to start the program. Having said that, we have got good traction, especially for SAP HANA across industries, Nitin.
Nitin Padmanabhan
Got it. The second is within the EMR vertical. So I think last quarter, you were a little hopeful that as there is some stability, this vertical could sort of recover in the second half. Any update on how you’re thinking about EMR on a going-forward basis?
Srinivas Pallia
You’re right, Nitin, EMR sector for us has degrown sequentially as well as year-on-year, especially the manufacturing in auto and industrial, we have seen a lot more impact on account of tariffs. This sector, where we see a lot of previous generation outsourcing deals, we’re hopeful to come back to the market. And these deals will be very, very competitive. So we will — we are definitely staying focused on that, and some of these deals are very critical for us.
As far as on the energy consulting side, we have started seeing some good traction, and we will stay focused on that. But broadly, Nitin, again, the point I made is that, we do see the opportunities in SAP S/4HANA space in some of our clients. And this is a quarter where many of our clients are doing budgeting planning, especially where they look at the discretionary spend and so on and so forth. So we are looking at that aspect as well. And many of these clients in the context of what’s coming at them, they are also driving cost optimization and vendor consolidation. So we continue to stay focused on that. And there could be — there are certain deals we are also seeing on the post-merger integration space. So that’s another one we are kind of focusing on.
Utilities, which is a part of the energy sector is kind of muted for now. But especially in the UK sector, we hope that sector would turn around. So broadly, there are multiple dimensions and aspects for energy and manufacturing. But net-net, Nitin, very valid — your question is very valid.
Nitin Padmanabhan
Perfect. Just one last one from my end. You alluded to a very strong sort of deal pipeline. Are you seeing any improvement in smaller-sized deals within that pipeline at the moment? And do you — how do you see furloughs this year currently when you just think about it versus last year? Thanks.
Srinivas Pallia
As far as the –. Yeah. Nitin, as far as the deal pipeline is concerned, like I said, after closing close to $9.5 billion of booking in H1, I would say, our pipeline is sustained and it is robust. And this is — if you ask me, going back to your specific question, this is evenly distributed across the large deal and across small deals. And I’m seeing this consistency across sectors and geos, so our pipeline is a lot more secular. But broad theme, Nitin is cost, of course, speed and AI-led efficiency as opportunities that keep coming towards. And there are — in the last few months, if you ask me, we have pitched in a lot of proactive ideas to our clients, especially because of the macro challenges that they are facing. And also, we are trying to convert that into our qualified pipeline initiatives as well.
Then, of course, there will be small vendor consolidation deals as and when it comes up, we’ll stay focused. The fact that we have won four mega deals, which are typically cost optimization and/or vendor consolidation, I think we have created a robust engine to go after the large deals, Nitin.
As far as furloughs are concerned [Speech Overlap]
Nitin Padmanabhan
Sure. And on the furloughs, yeah.
Srinivas Pallia
And as far as furloughs are concerned, we are taking a similar approach like last year. We’re taking that as the assumption right now, Nitin.
Nitin Padmanabhan
Perfect. Very helpful. Thank you so much and all the best.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to Mr. Abhishek Jain for closing comments. Over to you.
Abhishek Jain
Yeah. Thanks, Yashashri. Thank you all for joining the call. In case you have any follow-up questions, please feel free to reach out to the Investor Relations team. Thank you, and have a nice day.
Operator
[Operator Closing Remarks]