In the backdrop of global uncertainties and geopolitical issues impacting businesses, Tata Consultancy Services Ltd. (TCS) reported 6% growth in net profit at ₹12,760 crore over the year ago period aided by one time gain of ₹600 crore for the first quarter of 2025-26 ending June 30.
Revenue at ₹63,437 crore for the quarter, grew 1.3% Year on Year (YoY). However, the revenue declined 3.1% YoY in constant currency. Operating margin at 24.5% has seen an expansion of 30 bps quarter on quarter (QoQ). The net margin during the quarter was 20.1% . Net cash from operations at ₹12,804 crore was 100.3% of the net income during the quarter.
The board has announced an interim dividend of ₹11 per share. Record date of dividend is July 16 and payment date is August 4.
K. Krithivasan, Chief Executive Officer and Managing Director of TCS, 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 this quarter. We remain closely connected to our customers to help them navigate the challenges impacting their business, through cost optimization, vendor consolidation and AI-led business transformation”.
Aarthi Subramanian, Executive Director – President and Chief Operating Officer who addressed the TCS press conference for the first time after joining during the last quarter, said: “Across industries, clients are increasingly shifting their focus from using case-based approach to ROI-led scaling of AI. We are investing across the AI ecosystem, including infrastructure, data platform solutions, AI agents and business applications. Launching TCS SovereignSecureTM Cloud, TCS DigiBOLTTM, and TCS Cyber Defense Suite, to accelerate India’s AI led transformation was a particular highlight of this quarter,” she said.
Due to the uncertainties in business environment, the company has not announced any wage increase neither indicated any time frame in the near future. However, it said wage increase should be announced during the year.
It has not quantified as to how many freshers would be onboarded this year but said it would honour all the job offers it had made on the campuses.
As at the end of first quarter this fiscal, the company’s workforce stands at 6,13,069. Net head count during the quarter increased by 6,071. The LTM IT Services attrition rate was at 13.8%.
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 customer. It is gratifying to note that TCS now has 1,14,000 people with higher order AI skills,” he added.
The company said it was confident of improvements in it’s performance during this financial year.
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. Our industry leading profitability alongside robust cash conversion, positions us well to make strategic investments for the future”.
During the quarter, industry-wise BFSI grew 1%, consumer de-grew 3%, life science de-grew 9.6%, manufacturing de-grew 4%, Technology Services grew 1.8%, Communications & media de-grew 9.6%, energy resources grew 2.8%, and regional markets de-grew 8.6% indicating the headwind faced by businesses.
Region-wise, the company’s North America business de-grew 2.7%, Latin America was up 3.5%, U.K. was down 1.3%, Continental Europe down 3.1%, Asia Pacific grew 3.6%, and India business was down 21.7% due to the impact of the completion of the BSNL contract and MEA grew 9.4%.
Published – July 10, 2025 09:43 pm IST
