TCS reports low single digit growth for the second full year

TCS CEO K Krithivasan

Tata Consultancy Services (TCS), the country’s largest IT services player, has reported a 4.2 percent growth in constant currency (CC) for the financial year 2024-25, the second consecutive fiscal of low single digit growth amid business uncertainties for the wider sector.

FY25 though was a tad better than the previous year when the company grew at 3.4 percent.

“We closed the year with our revenue exceeding $30 billion…We had spoken about the improving market sentiments, and early signs of discretionary spend revival in January, but this was not sustained due to many discussions around tariffs,” chief executive officer and managing director K Krithivasan said at the earnings conference on April 10.

“We are observing delays in decision- making and projects starting with respect to discretionary investments. Despite this, all our major geographies exhibited sequential growth.”

The Mumbai-headquartered firm had the second highest quarterly order book at $12.2 billion without any mega deals in Q4.

Order book from North America stood at $6.8 billion, BFSI at $4 billion and consumer business at $1.7 billion. Most geographies and businesses had strong order book.

Based on the order book signed, Krithivasan expects calendar year 2025 to be better than the previous year. Though he did flag some short-term uncertainties, overall FY26 would be a better year than FY25, he said.

“Until February, we were quite positive and optimistic about the quarter, we started seeing some uncertainties creeping in March, resulting in some decision making and project delays. We have not seen any major project cancellations. Over the next few months this uncertainty should settle in, and we would be back to business,” Krithivasan commented.

The biggest concern for TCS and its rivals would be the US President Donald Trump’s reciprocal tariffs and sectoral tariffs, which are forcing customers to rethink technology spends causing delays in decision making.

“But we have to see with Trump delaying tariffs by 90 days, we’ll have to see how customers react. More projects lately have been cost optimisation related,” he said.

In Q4, TCS’ consolidated net profit fell nearly 2 percent from the year-ago period to Rs 12,224 crore.

Its consolidated revenue from operations rose 5.3 percent to Rs 64,479 crore.

The IT behemoth’s earnings missed expectations. A Moneycontrol poll of four brokerages had pegged Q4 net profit at Rs 12,554 crore and revenue at Rs 64,840 crore.