TCS Q1 earnings: Net profit jumps 6%, revenue rises 1.3%; company announces dividend of ₹11/share

Tata Consultancy Services (TCS), the country's largest information technology company, on Thursday, July 10, reported net profit of ₹12,760 crore in first quarter of the current financial year, marking an upside of 6% from ₹12,040 crore in the same period last year.

On a sequential basis, TCS' net profit advanced 4.38% from ₹12,224 crore. The profit numbers were better than HSBC estimates as analysts at HSBC were expecting the country's third largest company by market capitalisation to report net profit of ₹11,925 crore.

Its revenue from operations advanced 1.3% to ₹63,437 crore as against ₹62,613 crore in the year-ago period. The company's revenue in constant currency terms, however, declined 3.1%.

The company's operating margin in the first quarter expanded by 30 basis points to 24.5%.

Growth in the first quarter was led by AI and Data unit which delivered robust growth as clients prioritised scaling AI across the enterprise, transforming contact centres, optimising costs, and improving cyber defence capabilities, TCS said in a press release.

"Demand was led by AI-led transformation, SDLC/IT-Ops automation, and data-platform modernization. Our investments in WisdomNext™, TCS’ flagship AI platform are expanding with the addition of agentic AI capabilities. Strategic partnerships expanded, and our AI workforce with higher order skills exceeded 114,000, strengthening our leadership position in enterprise AI solutions," the Mumbai-based company said.

"We saw robust deal closures during this quarter. We remain closely connected to our customers to help them navigate the challenges impacting their business, through cost optimization, vendor consolidation and AI-led business transformation,” K Krithivasan, Chief Executive Officer and Managing Director, TCS said.

He added that geo-political uncertainties caused demand contraction.

“The continued global macro-economic and geo-political uncertainties caused a demand contraction," Krithivasan added.

TCS said that growth in enterprise solutions business was led by technology services, manufacturing and healthcare industry units in the first quarter.

"Clients are increasingly investing in streamlining their business workflows and modernizing their digital core by adopting AI powered SaaS platforms," TCS said.

"We saw strong deal wins involving large transformative engagements across customer experience, HR, and finance operations. The successful deployment of AI in business, highlights growing enterprise interest in autonomous operations. We are making good progress in building Agentic AI solutions across key business processes," TCS added.

TCS' total contract value at the end of June quarter came in at $9.4 billion.

"We continued our investments in long term sustainable growth this quarter. We stayed agile and adapted to the dynamic environment, delivering steady margins. Our industry leading profitability alongside robust cash conversion, positions us well to make strategic investments for the future,” said Samir Seksaria, Chief Financial Officer.

During the quarter a leading consumer electronics retailer partnered with TCS to drive its strategic vision of GenAI enablement at scale for reimagining business processes to be leaner and increasingly autonomous.

The company expanded strategic partnership with a European headquartered global Life Sciences company for its S/4 Hana led business transformation programme.

TCS total workforce at the end of June quarter stood at 613,069 with net headcount addition of 6,071.

The company announced interim dividend of ₹11 per share in the June quarter.

TCS shares ended 0.06% lower at ₹3,382 ahead of its earnings announcement.