Newsletter
Tata Consultancy Services (TCS) kicked off the Q1 FY26 earnings season with a mixed bag including strong profits and margins, but a slight revenue miss.
The stock ended Thursday up 0.4% & took off from lows just ahead of the results.
By the numbers: Net profit at ₹12,760 crore, up 6% YoY, better than expected. Revenue at ₹63,437 crore, up 1.3% YoY, slightly below estimates. Operating margin came in at 24.5% vs 24.2%.
Operating margin shows how much profit a company makes after covering its basic running costs like salaries, rent, and tech expenses.
Headcount update: TCS added 6,071 employees during April–June 2025, taking the total to 6,13,069. The rise was both sequential and annual.
Meanwhile, employee attrition ticked up to 13.8% from 13.3% in Q4 FY25.
Attrition rate simply means how many people left the company during the year.
Deal wins: the company bagged $9.4 billion in new deals this quarter which was a dip from the $12.2 billion total contract value (TCV) it reported in Q4 FY25.
TCV stands for Total Contract Value which is the full worth of all deals signed, spread over their duration.
In constant currency terms, revenue dipped 3.3% QoQ, showing currency effects masked some underlying softness.
Constant currency is a way to measure a company’s revenue or profit without the effect of currency exchange rate changes.
TCS management noted that slower demand had been expected, and softness in the first half of FY26 was baked into their outlook.
Big theme: after months of net outflows, Indian IT stocks saw fresh inflows of ₹2,489 crore in the last half of June.
TCS’ profit and margin resilience even with soft revenue and lower deal wins suggest that the IT sector isn’t in crisis, but it’s definitely not in high-growth mode either.
Q1 is usually soft, and TCS already hinted that H1 FY26 will be muted. Most Indian IT firms may echo similar tones. Growth is expected to pick up in H2 if macro conditions improve and enterprise tech budgets loosen up.
