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Tata Consultancy Services (TCS) reported its financial results for the first quarter of fiscal year 2026 (Q1 FY26), revealing a nuanced performance characterised by resilient profit growth amid a challenging global economic landscape that tempered revenue expansion.
Financial performance
TCS delivered a net profit of approximately Rs. 12,760 crore for Q1 FY26, marking a significant 6% year-on-year (YoY) increase. However, revenue growth presented a more tempered picture. The company reported a consolidated revenue of approximately Rs. 63,437 crore, reflecting a 3.1% YoY decline in constant currency terms.
Key financial highlights (Q1 FY26 vs. Previous Periods):
|
Metric |
Q1 FY26 (Crore) |
Q4 FY25 (Crore) |
Q1 FY25 (Crore) |
|
Revenue |
63,437 |
64,479 |
62,613 |
|
Net Profit |
12,760 |
12,224 |
12,040 |
|
Operating Margin |
24.5% |
24.2% |
24.7% |
|
Net Margin |
20.1% |
19.0% |
19.2% |
The company maintained a strong operating margin of 24.5%, showing resilience in operational efficiency despite the prevalent market conditions. Net margin stood at a healthy 20.1%. Cash flow from operations remained robust at 100.3% of net income, reinforcing the company's strong liquidity position.
Order book and deal wins
Despite the cautious revenue growth, TCS’s ability to secure large deals remains a positive indicator for future performance. The company reported a Total Contract Value (TCV) of USD 9.4 billion for the quarter, a testament to its continued appeal to clients seeking large-scale transformation initiatives. This strong order book provides visibility and a foundation for sustained growth in upcoming quarters. Notably, TCS lost 1 client in the over USD 100 million band and 9 clients in the over USD 50 million band, while the count remained same in the over USD 20 million band.
Headcount and talent management
TCS's workforce saw a net addition of 5,090 employees in Q1 FY26, bringing the total headcount to 613,069. The last twelve months (LTM) attrition rate in IT services increased to 13.8% in Q1 FY26 from 13.3% in Q4 FY25. Specific employee utilisation rates for the quarter were not disclosed in the public releases.
Outlook
TCS's Q1 FY26 results paint a picture of a company deftly navigating a challenging global environment. While revenue growth was modest, strong profit performance, robust deal wins, and strategic investments in cutting-edge technologies like AI position TCS for continued leadership.