TCS Q1 FY26 Earnings Report

📅 Quarter ended: June 30, 2025. Results announced on July 10, 2025

TCS Q1 Results FY26

📈 Financial Highlights

Net Profit (PAT): ₹12,760 cr — a 6% YoY rise from ₹12,040 cr a year ago .

Revenue: ₹63,437 cr (~US $7.4 bn), up 1.3% YoY, though down **3.1% in constant currency (CC)** .

Operating Margin: 24.5%, up 30 bps QoQ, with **net margin at 20.1%** .

Total Contract Value (TCV): $9.4 bn—lower than the previous quarter’s $12.2 bn and below typical forecasts .

💵 Dividend & Shareholder Returns

Interim dividend declared: ₹11 per share.

Record date: July 16, 2025; payment scheduled: August 4, 2025 .

Workforce & Attrition

Total employees: 613,069 (+6,071 net additions YoY) .

LTM attrition: 13.8%, slightly above management’s preferred ~13% threshold; efforts underway to rein it in .

🌍 Market & Segment Performance

Vertical trends:

BFSI: +1% YoY (in CC)

Technology & Services, Energy & Utilities: modest growth.

Consumer, Communications & Media, Life Sciences & Healthcare: sharper declines .

Geography: North America—the largest region—declined ~2.7% YoY, while Europe, MEA, APAC and LATAM posted moderate growth .

🗣️ Management Commentary:

CEO K. Krithivasan: Macro and geopolitical uncertainties—particularly U.S. tariff concerns—have restrained demand. However, robust deal closures, emerging-service momentum, and a pivot to AI-centric offerings offer optimism .

CFO Samir Seksaria: Emphasized continued investment in sustainable growth while preserving margins and strong cash flows .

CHRO Milind Lakkad: Clarified no headcount cuts due to AI; wage hikes are yet to be decided, and hiring will continue strategically .

🔍 Analysis & Outlook:

1. Profit beats, revenue misses: Despite topping net-income expectations, revenue lagged consensus—reflecting the global tech slowdown .

2. Margin resilience: Delayed wage hikes and lower expenses helped offset revenue pressure.

3. Deal-book dip: TCV contraction from Q4 signals cautious client spending.

4. AI and digital pivot: Launches like SovereignSecure Cloud, DigiBOLT, and Cyber Defense Suite demonstrate TCS’s strategic acceleration into high-growth segments .

5. Outlook guidance: Management remains cautiously positive—expects FY26 revenue to outpace FY25, contingent on macro stabilization .

📝 Bottom Line

TCS has delivered a solid but cautious Q1 amidst uncertain global conditions. While earnings beat helped confidence, weak revenue and deal bookings temper enthusiasm. The focus has shifted to cost control, renewals in AI-led services, and navigating geopolitical headwinds. Watch for progress on wage decisions, deal velocity, and market clarity—especially in H2 FY26.

Disclaimer: This story is for educational purposes only. We advise investors to check with certified experts before making any investment decisions.