India’s largest IT firm, Tata Consultancy Services (TCS), announced its Q1 FY26 results on July 10, 2025. The company posted a net profit of ₹12,760 crore, a 6% year-on-year rise, beating Street estimates.
However, revenue growth lagged, rising just 1.3% YoY to ₹63,437 crore—missing analyst forecasts of ₹64,636 crore. The TCS share price closed 0.4% higher ahead of the results.
Despite top-line pressure, TCS results reflect operational strength and investor confidence through the ₹11 interim dividend.
TCS Q1 FY26 Key Financial Highlights
| Metric | Q1 FY26 | YoY Change | Analyst Estimate |
|---|---|---|---|
| Net Profit | ₹12,760 crore | +6% | ₹12,263 crore (Bloomberg) |
| Revenue | ₹63,437 crore | +1.3% | ₹64,636 crore |
| EBIT Margin | 24.5% | +30 bps QoQ | 24.2% (Q4 FY25) |
| Total Contract Value (TCV) | $9.4 billion | – | $8–9 billion expected |
| Dividend Declared | ₹11/share (interim) | – | – |
| Attrition (LTM) | 13.8% | +0.5% QoQ | 13.3% in Q4 FY25 |
Global Demand Weakness Impacts TCS Revenue
The modest revenue growth reflects ongoing macroeconomic and geopolitical uncertainties, particularly in key geographies such as North America and Europe.
K Krithivasan, CEO of TCS, commented, “The continued global macro-economic and geo-political uncertainties caused a demand contraction. On the positive side, all the new services grew well. We saw robust deal closures during this quarter.”
In constant currency terms, revenue declined by about 3.1%, indicating stress in core verticals like BFSI and retail.
Strong Profit and Margins in Q1 FY26
Despite revenue headwinds, TCS results showcased robust profitability:
- EBIT margin expanded to 24.5% (up 30 basis points QoQ).
- Net margin stood near 20.1%, boosted by lower expenses and better cost control.
Samir Seksaria, CFO, stated, “We continued our investments in long-term sustainable growth. We stayed agile and adapted to the dynamic environment, delivering steady margins.”
TCS Order Book & Deal Wins
TCS order book stayed resilient with Total Contract Value (TCV) at $9.4 billion, slightly lower than Q4’s $12.2 billion but still above market expectations. Strong deal momentum was seen across cloud, AI, cybersecurity, and digital services.
Workforce & Talent Development
TCS added 6,071 employees in Q1 FY26, increasing total headcount to 6,13,069.
Notably, the company emphasized AI capability building, with:
- 15 million hours invested in training.
- 1,14,000 employees now equipped with higher-order AI skills.
Milind Lakkad, CHRO, said, “Talent Development is core to TCS. Our associates are leading AI-led transformations for global clients.”
The company’s attrition rate rose slightly to 13.8%, compared to 13.3% in the previous quarter.
TCS Dividend and Record Date
TCS declared an interim dividend of ₹11 per share.
- Record Date: July 16, 2025
- Payment Date: August 4, 2025
This is consistent with TCS’s history of generous payouts.
TCS Share Price Reaction
Ahead of the Q1 earnings announcement, TCS share price closed 0.4% higher at ₹3,397.1 on the NSE. The market reacted cautiously, reflecting a mixed set of numbers.
Investors are closely watching for signals of recovery in discretionary tech spending and enterprise IT budgets.
Outlook for FY26
Looking ahead, TCS expects:
- Growth to accelerate in the second half of FY26, driven by recovery in client spending.
- Continued investment in cloud, generative AI, and platform-based delivery models.
- No headcount reduction due to AI; instead, AI will be a growth catalyst.
“We’re positioned strongly for transformation-led growth once macro pressures ease,” said Krithivasan.
Conclusion
The TCS Q1 FY26 results reflect a resilient and disciplined performance in a challenging environment. While revenue came in below expectations, profitability, margin expansion, strong deal wins, and dividend payout reassured investors.
As global demand stabilizes, TCS is expected to benefit from its AI-first workforce, robust deal pipeline, and focus on sustainable digital transformation.