Tata Consultancy Services (TCS), India's largest IT services company, has announced its financial results for the first quarter of fiscal year 2026, demonstrating resilience in the face of global economic headwinds.

Financial Highlights

TCS reported a revenue of ₹63,437.00 crore for Q1 FY26, marking a 1.3% year-on-year growth. The company's net profit stood at ₹12,760.00 crore, showing a robust 6.0% increase compared to the same quarter last year. The operating margin remained steady at 24.5%, with a 30 basis points expansion quarter-on-quarter.

Strong Order Book

Despite the challenging global environment, TCS secured a total contract value (TCV) of $9.40 billion for the quarter. This robust order book underscores the company's ability to win large deals and maintain client confidence.

Segment Performance

The Banking, Financial Services, and Insurance (BFSI) sector continued to be the largest revenue contributor, accounting for 32.0% of the total revenue. Notable growth was observed in Energy, Resources and Utilities, and Technology & Services segments.

Dividend Declaration

The Board of Directors has declared an interim dividend of ₹11.00 per equity share, maintaining its commitment to shareholder returns.

Workforce and Attrition

TCS's workforce stood at 613,069 as of June 30, 2025, with a net addition of 6,071 employees year-on-year. The company reported a significant improvement in attrition rates, with IT services attrition at 13.8% for the last twelve months.

Co-CEO's Statement on Current Situation

K Krithivasan, Chief Executive Officer and Managing Director, addressed several key points regarding the company's current situation:

1. M&S Hack Investigation: TCS clarified that it is not under investigation in the M&S hack, affirming compliance with procedures as the investigation continues.

2. Hiring Outlook: Despite advancements in AI, TCS stated that hiring will remain stable.

3. U.S. Bill Impact: A new U.S. bill is expected to bring clarity by late July or early August, potentially impacting the company's operations in the region.

4. Revenue Growth Outlook: While expressing confidence in international revenue growth for FY26 compared to FY25, the Co-CEO noted it's too early to predict when growth will restart.

5. Project Delays: TCS reported ongoing delays in decision-making and project initiation for discretionary projects, reflecting the current global economic uncertainties.

Market Challenges and Outlook

The company acknowledged the impact of global macro-economic and geo-political uncertainties on demand. However, TCS remains optimistic about its ability to navigate these challenges, citing robust deal closures and growth in new services.

Krithivasan stated, "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."

As TCS continues to adapt to the evolving market conditions, its focus on innovation, client relationships, and operational efficiency positions it well to capitalize on future opportunities in the global IT services landscape.

Tata Consultancy Services (TCS), India's largest IT services company, has reported a strong financial performance for the first quarter, demonstrating resilience in the face of global economic challenges.

Financial Highlights

TCS posted a consolidated revenue of ₹63,437.00 crore for Q1, marking a 1.3% year-on-year growth. The company's net profit rose to ₹12,760.00 crore, reflecting a 6.0% increase compared to the same period last year. The operating margin stood at a healthy 24.5%, expanding by 30 basis points quarter-on-quarter.

Order Book and Business Performance

Despite global economic uncertainties causing a demand contraction, TCS secured a robust order book of $9.40 billion for the quarter. The company's CEO and Managing Director, K Krithivasan, emphasized the strength of deal closures during this period, highlighting TCS's ability to navigate challenges and support clients in their business transformation journeys.

Segment Performance

The Banking, Financial Services, and Insurance (BFSI) sector continued to be the largest contributor to TCS's revenue, accounting for 32.0% of the total. Other significant segments included Consumer Business (15.6%) and Communication, Media and Technology (8.4%).

Workforce and Talent Development

As of June 30, TCS's workforce stood at 613,069, with a net addition of 6,071 employees year-on-year. The company reported a last twelve-month IT services attrition rate of 13.8%, indicating improved talent retention. TCS emphasized its focus on talent development, with employees investing 15 million hours in building expertise in emerging technologies.

AI and Innovation Focus

TCS has been actively investing in artificial intelligence (AI) capabilities. The company now boasts 114,000 employees with higher-order AI skills, positioning it strongly in the rapidly evolving tech landscape. TCS is seeing increased client interest in scaling AI across enterprises, with a shift from use-case based approaches to ROI-led scaling of AI solutions.

Strategic Partnerships and Client Wins

The quarter saw TCS expanding its strategic partnerships and securing significant client wins across various sectors. Notable developments include:

• Collaboration with IBM to advance quantum algorithm and application development in India.
• Partnership with a leading Canadian bank for enterprise data transformation and management.
• Expansion of a long-standing relationship with Virgin Atlantic to accelerate its digital transformation journey.
• Selection by Jazeera Airways to drive its next phase of digital transformation.

Outlook and Challenges

While TCS demonstrated strong performance, the company acknowledged ongoing global macro-economic and geo-political uncertainties affecting demand. The Co-CEO noted delays in decision-making and project initiation for discretionary projects. However, TCS remains confident in its ability to drive international revenue growth in the coming fiscal year.

Dividend Declaration

The Board of Directors has declared an interim dividend of ₹11.00 per equity share, maintaining its commitment to shareholder returns.

In conclusion, TCS's Q1 results reflect the company's resilience and strategic focus on emerging technologies, particularly AI, amidst a challenging global economic environment. The robust order book and steady financial performance position TCS well for navigating the evolving market dynamics in the IT services sector.