The key thing to watch for in Wipro’s March quarter results was whether it would live up to its aim of achieving the industry level growth rate by the end of March 2018. From that perspective, the results have been a major disappointment. The company’s constant currency IT services revenues increased 1.1% sequentially, lower than most analyst estimates.

Profitability trailed Street estimates by a wide margin as the company booked impairment loss at one of its acquisitions and made provisions for loss of revenues arising out of the insolvency of two of its customers. Adjusting for this, Wipro claims operating margins of 16%, which is nonetheless still lower than Street estimates of about 17%.

What’s worse is that guidance for the June quarter implies revenue contraction at the lower end and a minuscule 0.1% growth at the upper end of the guidance, on a sequential basis. Further, margins can remain soft in June quarter as well, as the company deals with the revenue loss due to the above-mentioned insolvencies of two of its customers and also tackles wage hikes.

In short, both the performance and the commentary is way off the growth convergence with the industry narrative (see chart).

Thankfully, investors have been taking the optimism with a dose of salt and the stock is pricing in the caution. It began trailing the broader markets beginning this year as the company flagged off the client-specific issues and its financial impact. But nobody is prepared for a drop in revenues in the June quarter. “Any guidance below 0%-2% constant currency growth (on a low base) for 1QFY19 will be disappointing," Nirmal Bang institutional equities had said in its results preview note.

The management expects the company to return to the growth path in the second quarter of the current financial year, thanks to strong order wins in the digital part of the business. “Our strong order bookings in the last two quarters provide us the right foundation to grow as we progress through the year," Abidali Z. Neemuchwala chief executive officer, Wipro said in a statement. Further, the management sees “building blocks" forming for margin improvement in the rest of the fiscal year, aided by better client mining and business mix.

But investors may refuse to bite. The company has had too many false starts and it is not yet clear when the growth rates will begin to move up. “Given the kind of guidance, they (Wipro) are far away from what the industry is going to deliver," says Sanjeev Hota, associate vice president-research, Sharekhan.

To be fair though, as Abhishek Shindadkar, analyst at Equirus Securities Pvt. Ltd says, it would be churlish to expect Wipro to predict their clients going bankrupt. It is unfortunate for Wipro that these setbacks have come in a single quarter. But unfortunately, the net impact of all of this and the weak performance, adds Shindadkar, could be earnings cuts and further pressure on the stock—a far cry from its stellar run in 2017.