TCS Q4 Results: Net Profit Falls 1.26%, Margin Contracts

Revenue of Tata Consultancy Services Ltd rose marginally to 0.79% over the previous three months to Rs 64,479 crore in the quarter ended March 31, 2025, according to an exchange filing on Thursday. That compares with the Rs 64,848 crore consensus estimate of analysts tracked by Bloomberg.

TCS Q4 Results: Key Highlights (QoQ)

• Revenue up 0.79% at Rs 64,479 crore (estimate: Rs 64,848.2 crore).

• EBIT down 0.36% to Rs 15,601 crore (estimate: Rs 16,141.2 crore).

• Margin contracted 27 basis points to 24.19% (estimate: 24.89%).

• Net profit fell 1.26% to Rs 12,224 crore (estimate: Rs 12,766 crore).

Margins in the fourth quarter dipped 30 basis points sequentially at 24.2%, from 24.5% last quarter. The company's Total Contract Value stood at $12.2 billion, higher than $10.2 billion recorded last quarter. For FY25, TCV stood at $39.4 billion.

K. Krithivasan, Chief Executive Officer and Managing Director, said, “Improving market sentiment and revival of discretionary spending have not been sustained due to tariff discussions. We are observing delays in decision-making and project starting. However, CY25 is still expected to be better than CY24 based on the current order book.”

The CEO added that there are short-term uncertainties; while sentiment was positive till February, some uncertainty crept in March. The uncertainty has resulted in a delay in decision-making, while no cancellations or ramp-downs have been seen so far. TCS expects uncertainty to settle in the near term.

The banking, financial services and insurance vertical saw a 0.7% YoY growth, lower than the 0.9% recorded last quarter. Consumer business hiked 0.3%, manufacturing rose 2.9%, and the energy and resources and utilities vertical grew 5.1%. However, the communication and media vertical dipped the highest at 9.5% YoY. Life sciences and healthcare and technology and services verticals dipped 1.6% and 1.3%, respectively.

In terms of geographies, the India region recorded 62.6% YoY growth, lower than the 70.2% recorded last quarter, amid the BSNL deal coming to a closure. The company expects the BSNL deal to come to a closure in the first quarter. North America dipped 1.8%, while Latin America rose 6%.

TCS anticipates sectors such as retail, CPG, travel, and hospitality to be most impacted, while the auto sector is already being impacted due to tariffs. However, the demand environment in the BFSI sector remains positive, according to the management.

Commenting on the dip in margins, Samir Seksaria, CFO, TCS, noted that the increments rolled out and investments made in certain areas resulted in the dip. “ FY 26 guidance range remains at 26-28%. The current environment is expected to have some impact on operating leverage.”

Employee headcount at the end of the year stood at 607,979, an increase of 625 employees. Attrition rate in the quarter inched up to 13.3% from 13% in the last quarter.

Milind Lakkad, CHRO, TCS, said, “Next year's fresher onboarding targets will remain similar to last year's target of 42000. Wage hikes in the year, though, remain undecided and will be considered based on the evolving business environment.”