Tata Consultancy Services announced a 6% year-on-year increase in profit and a 1% rise in revenue for Q1FY26. The firm acknowledged a contraction in demand due to global uncertainties but emphasized strong deal closures.
TCS Q1 Results: The IT giant Tata Consultancy Services (TCS) released its earnings for the June quarter (Q1FY26) after market hours on Thursday, July 10. The company reported a 6 percent year-on-year profit growth, while revenue saw a modest increase of just 1 percent.
The firm pointed out a contraction in demand attributed to global macroeconomic and geopolitical uncertainties, yet noted that it experienced strong deal closures during the June quarter.
"The ongoing global macroeconomic and geopolitical uncertainties have led to a contraction in demand. On a positive note, all new services have shown significant growth. We experienced strong deal closures in this quarter," stated K Krithivasan, Chief Executive Officer and Managing Director of TCS.
"We maintain a close connection with our customers to assist them in navigating the challenges affecting their businesses, through cost optimization, vendor consolidation, and AI-driven business transformation," the TCS CEO remarked.
In addition, the company announced an interim dividend of ₹11 per share for FY26, with a face value of ₹1 each.
TCS Q1 earnings: Five key highlights
1. The numbers
The consolidated profit for the quarter increased by 6 percent year-on-year (YoY), reaching ₹12,760 crore compared to ₹12,040 crore in the same quarter of the previous year. Revenue from operations rose by 1.3 percent YoY to ₹63,437 crore in Q1FY26, up from ₹62,613 crore in Q1FY25.
Nevertheless, when adjusted for constant currency (CC), revenue experienced a decline of 3.1 percent YoY.
The operating margin for the quarter was recorded at 24.5 percent, reflecting an increase of 30 basis points sequentially.
"This quarter, we maintained our focus on investments aimed at long-term sustainable growth. We remained agile and responsive to the changing environment, achieving stable margins. Our leading profitability in the industry, coupled with strong cash conversion, positions us favorably for making strategic investments in the future," stated Samir Seksaria, Chief Financial Officer of TCS.
2. How did the key domains perform?
Most sectors experienced a downturn during the quarter, with both the "Communication & Media" and "Life Sciences & Healthcare" sectors declining by 9.6 percent YoY in CC terms.
The "Regional Markets & Others" segment saw a decrease of 8.6 percent YoY, while the "Manufacturing" sector experienced a decline of 4 percent YoY, and the "Consumer Business" sector fell by 3.1 percent YoY.
Conversely, the BFSI segment recorded a growth of 1 percent YoY in CC terms. The "Energy, Resources and Utilities" and "Technology & Services" sectors grew by 2.8 percent and 1.8 percent YoY, respectively.
3. Regional markets
Among the major geographical markets, India experienced a notable decline of 21.7 percent YoY in CC terms, followed by Continental Europe, which saw a decrease of 3.1 percent YoY, and North America, which declined by 2.7 percent YoY.
Conversely, the MEA market experienced a year-on-year growth of 9.4 percent, while the Asia Pacific and Latin America regions recorded respectable growth rates of 3.6 percent and 3.5 percent, respectively.
4. Significant Deal Achievements
The company reported that during the quarter, clients focused on scaling AI throughout the enterprise, transforming contact centers, optimizing costs, and enhancing cyber defense capabilities.
"The quarter's growth was primarily driven by AI & Data, TCS Interactive, and Cyber Security.
Key themes in significant deals included operating model transformation, vendor consolidation, AI-driven intelligent automation, and SAP S4/HANA-based transformation agreements," stated TCS.
The total contract value (TCV) for Q1 reached $9.4 billion.
Among the notable deal achievements, TCS announced a partnership with IBM to further quantum algorithm and application development, playing a pivotal role in the Quantum Valley Tech Park in India.
Additionally, it collaborated with a major Canadian bank for Enterprise Data Transformation and Management.
TCS has also joined forces with Jazeera Airways, Kuwait’s premier low-cost airline, to propel the next phase of its digital transformation.
Furthermore, TCS has extended its two-decade-long strategic partnership with Virgin Atlantic to expedite its digital transformation journey.
5. Workforce and Attrition Rates
As per the company's exchange filing, TCS’s workforce totaled 613,069 as of June 30, 2025.
The attrition rate in IT services was recorded at 13.8 percent over the past twelve months.
"Our associates dedicated 15 million hours and gained 1.3 million competencies in emerging technologies, empowering them to spearhead the transformation journey for our clients," the company remarked.
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