The country’s largest information technology company, Tata Consultancy Services (TCS), on Thursday, July 10, reported a net profit of ₹12,760 crore in the first quarter of the current financial year, up 6% from ₹12,040 crore in the same period last year.
On a sequential basis, TCS’ net profit rose 4.38% from ₹12,224 crore. The profit figures were better than HSBC estimates as analysts at HSBC expected the country’s third-largest company by market capitalisation to report a net profit of ₹11,925 crore.
Its operating revenue rose 1.3% to ₹63,437 crore as against ₹62,613 crore in the same period a year ago. However, the company’s revenue declined by 3.1% in constant currency terms.
The company’s operating margin expanded 30 basis points to 24.5% in the first quarter.
TCS said in a press release that the growth in the first quarter was led by the AI and Data unit, which recorded strong growth as clients preferred expanding AI across the enterprise, transforming contact centers, cost optimization and improving cybersecurity capabilities.
The Mumbai-based company said, “AI-led transformation, SDLC/IT-operations automation and data-platform modernization contributed to the demand. Our investments in WisdomNext™, TCS’ flagship AI platform, are growing with the addition of agentic AI capabilities. Strategic partnerships have expanded and our AI workforce with high-end skills has grown to over 114,000, strengthening our leadership position in enterprise AI solutions.” TCS Chief Executive Officer and Managing Director K. Krithivasan said, “We witnessed several great deals during the quarter. We are working closely with our clients to help them address challenges impacting their business through cost optimization, vendor integration, and AI-based business transformation.”
He further added that geopolitical uncertainties have led to a slowdown in demand.
Krithivasan further added, “Continued global macro-economic and geopolitical uncertainties have led to a slowdown in demand.”
TCS said growth in the enterprise solutions business in the first quarter was led by technology services, manufacturing, and healthcare industry units.
“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 deals involving large transformational engagements across customer experience, HR and financial operations. Successful use of AI in business reflects enterprises’ growing interest in autonomous operations. We are making good progress in building agentic AI solutions across key business processes.”
TCS’ total contract value at the end of the June quarter was $9.4 billion.
Chief Financial Officer Sameer Seksaria said, “We continued our investments in long-term sustainable growth in the quarter. We remained agile and achieved stable margins while adapting to the dynamic environment. Our industry-leading profitability and strong cash conversion capability position us to make strategic investments for the future.”
During the quarter, a leading consumer electronics retailer partnered with TCS to advance its strategic vision of large-scale GenAI enablement to make business processes more streamlined and autonomous.
The company expanded its strategic partnership with a European-headquartered global life sciences company for its S/4 HANA-led business transformation program.
TCS’ total employees stood at 6,13,069 at the end of the June quarter, with a net increase of 6,071 employees.
The company declared an interim dividend of ₹11 per share for the June quarter.
TCS shares closed 0.06% lower at ₹3,382 ahead of its earnings announcement.
