India’s largest IT services company Tata Consultancy Services (TCS) saw a significant decline in total contract value (TCV) in the second quarter ended September 30 for the fiscal year 2025, with the order book at $8.6 billion. This comes at a time when the IT industry is yet to see the impact of the recent interest rate cut by the US Federal Reserve.
The TCV for the quarter was 23.2 percent lower from the $11.2 billion in the year-ago period and was up 3.6 percent from the previous quarter, the company said on October 10.
According to analysts, the company had reported several large deals in Q2. Deal wins this quarter were dominated by the retail sector majorly, including deal wins from Primark, McDonald’s and Croma. Interestingly, many of them were business transformation and digital transformation deals, unlike the perception that customers are only spending on efficiency and cost take-out deals.
K Krithivasan, Chief Executive Officer and Managing Director said: “We saw the cautious trends of the last few quarters continue to play out in this quarter as well. Amidst an uncertain geopolitical situation, our biggest vertical, BFSI showed signs of recovery. We also saw a strong performance in our Growth Markets. We stay focused on sharpening our value proposition to our clients, employees and other stakeholders”.
Geographically, demand was led by India market, which grew 95.2 percent YoY in constant currency (CC) terms, followed by MEA at 7.9 percent, Asia Pacific at 7.5 percent and Latin America at 6.8 percent.
India growth was majorly driven by the execution of the Rs 15,000-crore BSNL deal. As per analysts at JM Financial, there’s an estimated incremental revenue contribution of about $75 million coming from the BSNL deal, which will, in turn, drive another quarter of growth for the regional markets segment that includes India too.
Core markets, including North America, declined 2.1 percent in CC YoY. The UK grew 4.6 percent but Continental Europe only 1.8 percent.
Among verticals, BFSI, which accounts for 30-40 percent of the revenue, grew 0.1 percent YoY in CC terms. Consumer business was up 0.1 percent, technology services declined 1.9 percent and communication and media slumped 10.3 percent.
The company said that they have now over 600 AI/GenAI engagements deployed successfully in production or in various phases of development. Last quarter, it was about 270 projects in the pipeline.
The company reported its Q2 earnings on October 10. Profit was down 1.1 percent quarter-on-quarter (QoQ) at Rs 11,909 crore, missing Street expectations. India’s largest IT service firm’s Q2 FY25 revenue from operations rose to Rs 64,259 crore, showed the stock exchange filing.
A Moneycontrol poll of 10 brokerages pegged TCS’ July-September net profit at Rs 12,420 crore, and revenue at Rs 63,938 crore.
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