Tata Consultancy Services on Thursday announced its Q1FY26 net profit rose 6 percent year-on-year to Rs 12,760 crore. The earnings surpassed Street expectations. A Bloomberg consensus poll of analysts pegged TCS' April-June net profit growth at a muted 1.9% to Rs 12,263 crore.
India's largest IT company also said its revenue from operations grew 1.3 percent to Rs 63,437 crore for the April-June quarter. That was lower than the Bloomberg consensus estimate of Rs 64,636 crore.
The profit jump was driven by one-off tax benefits and savings in equipment and software licenses required for a large transformation project that wound down.
India, which was leading geographical growth for past several quarters, declined by 21.7% YoY in CC terms in Q1, an impact of the BSNL mega deal revenue tapering post completion.
TCS declared an interim dividend of Rs 11 per share of Re 1 face value each. "The interim dividend shall be paid on Monday, August 4, 2025, to the equity shareholders of the Company," it said in a stock exchange filing. The firm set July 16, 2025 as the record date to note the beneficiaries for the dividend payout.
Ahead of the earnings announcement, TCS share price ended with moderate gain 0.4% at Rs 3,397.1.
Operating margins expanded sequentially. The EBIT margin for the fiscal first quarter expanded 30 bps to 24.5 percent from 24.2% in Q4.
K Krithivasan, Chief Executive Officer and Managing Director, said: "The continued global macro-economic and geo-political uncertainties caused a demand contraction. On the positive side, all the new services grew well. We saw robust deal closures during this quarter."
“We had spoken about delays in decision-making when projects start with respect to discretionary investments. This trend has continued and intensified to some extent in this quarter as global businesses were disrupted due to conflicts, economic uncertainty and supply chain issues,” Krithivasan added while speaking at the company’s earnings conference in Mumbai.
The company's Total Contract Value (TCV) for the quarter stood at $9.4 billion, down from $12.2 billion clocked in Q4. This was more than the Street estimates of $8-9 billion.
Samir Seksaria, Chief Financial Officer, said: ""We continued our investments in long term sustainable growth this quarter. We stayed agile and adapted to the dynamic environment, delivering steady margins."
TCS said it added 5,090 employees during the April-June 2025 quarter. With this, the total number of TCS employees stood at 6,13,069 as of June 30, 2025.
According to a TCS statement released on July 10, the company’s IT services attrition rate (last twelve-month basis) inched up to 13.8% in Q1FY26, compared with 13.3% in the previous quarter. The attrition had stood at 13% in the December 2024 quarter.
Milind Lakkad, Chief HR Officer, said: “Talent Development is core to TCS. In this quarter, our associates invested 15 million hours in building expertise in emerging technologies, enabling them to lead the transformation journey for our customers. It is gratifying to note that TCS now has 1,14,000 people with higher order AI skills”.
TCS CEO K Krithivasan attributed the muted growth to global macro-economic and geo-political uncertainties causing demand contraction.
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