Early signs of recovery haven't sustained due to tariffs, says TCS CEO K Krithivasan

Tata Consultancy Services

India's largest IT software exporter Tata Consultancy Services (TCS) CEO K Krithivasan said the company's order book could have been better if the global uncertainties following US President Donald Trump's tariffs didn't kick in.

Notably, most of the revenues of the company originate from North America.

TCS CEO K Krithivasan said no region would want to continue with such global uncertainties for a very long period of time.

"I believe some certainty will emerge in the near time. We will know where this rare trade policy regime takes us forward," Krithivasan said while speaking about US President Donald Trump's tariffs.

Nonetheless, he added that "Since yesterday's announcement (delay of 90 days in tariff by US), we need to see if the uncertainty will carry.” Moreover, the impact of uncertainties in the US majorly impacts consumer and automobile verticals.

Brokerage Centrum Broking's analysts Piyush Pandey and Vagish Nandal said in a research note that decision cycles are lengthening on geopolitics, but no major deal cancellations were reported.

During the post-earnings press conference, TCS CEO K Krithivasan said the early signs of recovery in discretionary spending were not sustained due to the US tariffs.

“What we are seeing in the market, I would expect there would be delays in decision-making on discretionary spend if this uncertainty continues,” he added.

Earlier, analysts at Nuvama said they would watch out for an outlook on the US macroeconomic environment amid the tariff uncertainty and margin recovery trajectory.

Nevertheless, Krithivasan said the IT major expects calendar year 2025 to be better than 2024. "FY26 will be better than FY25, though there will be some short-term uncertainties," he added.

For Q4, the Mumbai-headquartered company's consolidated net profit fell nearly 2 percent year-on-year to Rs 12,224 crore, amid the ongoing macroeconomic headwinds for the IT sector. India’s largest IT services company had reported a consolidated net profit of Rs 12,434 crore in the corresponding quarter last year.

TCS’ consolidated revenue from operations rose 5.3 percent year-on-year to Rs 64,479 crore in quarter ending March, as against Rs 61,237 crore in the same quarter a year ago.

The IT behemoth’s earnings missed expectations. A Moneycontrol poll of four brokerages pegged TCS’ January-March net profit at Rs 12,554 crore, and revenue at Rs 64,840 crore.

Shares of the company closed at Rs 3,246.60 on April 9, down 1.41 percent on the National Stock Exchange.