TCS Q1 Results: Profit Beats Estimates but Revenue Miss Weighs on Market Sentiment

Tata Consultancy Services (TCS), India’s largest IT services exporter, reported a 6% year-on-year increase in consolidated net profit at ₹12,760 crore for the quarter ended June 2025 (Q1 FY26). While the bottom-line exceeded market expectations, the revenue performance fell short, triggering a cautious response from investors.
Revenue for the quarter stood at ₹63,437 crore, up 1.3% YoY but down 3.1% in constant currency terms. Analysts had projected revenue to touch approximately ₹64,667 crore, making the shortfall a key concern. The company attributed the weak topline to continued macroeconomic headwinds and client spending delays.
Despite stable operational margins at 24.5% and a robust order book with deals worth $9.4 billion, TCS shares slipped around 2% in intraday trading post the results. The decline reflected broader sectoral anxiety, with Infosys and Wipro ADRs also registering steep declines on U.S. exchanges.
TCS CEO K. Krithivasan pointed to ongoing geopolitical and economic uncertainties impacting client budgets, especially in key Western markets. “While the long-term outlook remains strong, the near-term challenges are evident in the topline performance,” he said during the earnings call.
The company announced an interim dividend of ₹11 per share, with the record date set for July 16. TCS also reported strong cash flow generation of ₹12,804 crore, indicating sound financial health despite a turbulent demand environment.
Employee headcount rose modestly by 6,071, bringing the total workforce to over 613,000. Attrition remained elevated at 13.8%, although slightly improved from the previous quarter.
Market analysts remain cautiously optimistic. While brokerages like Nuvama and Motilal Oswal retained ‘Buy’ ratings, they revised down their target prices citing revenue weakness and delayed recovery in client spending.
TCS’s Q1 numbers highlight a mixed quarter—profit resilience offset by growth pressure. As global tech spending remains under scrutiny, the focus now shifts to execution strength and demand revival in the quarters ahead.