TCS Net Profit Down 2%, Revenue Up 5.3% Led by Regional Markets TCS crosses USD 30 billion revenue milestone for FY25 led by strong double-digit growth in regional markets at 37.2 per cent YoY

Tata Consultancy Services (TCS), India's largest software exporter by revenue, kicks off the earnings season reporting a net profit of INR 12,224 crore for the fourth quarter ended March, down nearly 2 per cent from the year-ago period.

The revenue for the fourth quarter was up 5.3 per cent to INR 64,479 crore, led by strong growth in the regional markets at 37.2 per cent YoY.

The dollar revenue for the fourth quarter grew 2.5 per cent annually in constant currency to USD 7.5 billion on the back of large deals worth a total contract value of USD 12.2 billion.

"We are pleased to cross the USD 30 billion in annual revenues and achieve a strong order book for the second consecutive quarter. Our expertise in AI and Digital Innovation, coupled with the unmatched knowledge of customer context and global scale makes us the pillar of support for our customers in this environment of macroeconomic uncertainty. We remain committed to staying close to our customers and helping them achieve their core priorities," said K Krithivasan, Chief Executive Officer and Managing Director, TCS, said.

"The improvements about market sentiment we spoke of in January was not sustained…We are observing delays in decision making and project starting with respect to discretionary investments," Krithivasan said at a post-earnings media briefing. "We have not seen any major project cancellations, some ramp downs here and there."

The Indian IT services industry may brace for a challenging year ahead as the new tariffs under American President Donald Trump are likely to increase inflation in its key US market and force clients to cut spending. The recent tariff rates add to the existing delays in the decision-making cycle of clients and a cut in discretionary spend.

Operating margins for the March quarter narrowed 180 basis points to 24.2 per cent from 26 per cent in the corresponding quarter of the previous year. On a sequential basis, it narrowed 30 basis points from 24.5 per cent in the preceding three months.

Samir Seksaria, Chief Financial Officer, said "In FY25, our disciplined execution and operational rigor stood out again, as we defended our industry-leading margins while continuing with our investments in talent and capability building. We delivered robust profitability and cash flows this quarter in a very challenging environment without compromising on the right investments in our people, innovation and infrastructure for long-term value creation."

Banking, Financial services & Insurance (BFSI), the largest vertical for TCS grew 0.7 per cent YoY in constant currency and contributed 31.2 per cent to the total revenue as of the March quarter. Consumer Business, the second largest vertical grew 0.3 per cent YoY and contributed 15.3 per cent to the revenue.

"Despite challenges like global uncertainties, budget cuts, and increased competition, TCS managed its fiscal situation well. The company expects its deal acquisitions to stay steady and has established itself as a strategic provider in almost all industries," said Biswajit Maity, Senior Principal Analyst at Gartner.

"Looking ahead to 2025, there is optimism for a return to double-digit growth, driven by digital transformation and the influence of Generative AI, which 57 per cent of providers see as a key growth driver," Maity added.

The attrition rate on a trailing 12-month basis marginally increased to 13.3 per cent from 13 per cent in the preceding three months taking the total headcount to 607,979 as of March 31, 2025.

TCS declared its results on Thursday when markets were closed. On Wednesday, shares of TCS closed down 1.44 per cent at INR 3,246.10 on the BSE.