Tata Consultancy Services (TCS) Q1 25/26 (Media) earnings summary

Executive summary

• Revenue for the quarter was INR 63,437 crore, up 1.3% YoY, but declined 3.1% YoY in constant currency, mainly due to delays in discretionary investments and the BSNL contract wind-down.

• Operating margin stood at 24.5% (up 30 bps sequentially), and net margin at 20.1%.

• Net profit was INR 12,819 crore, with EPS at 35.27 per share.

• Order book reached $9.4 billion, up 13.2% YoY, with strong pipelines in AI, data, cybersecurity, and digital engineering services.

• Interim dividend of INR 11 per share declared, payable August 4, 2025.

Financial highlights

• Operating profit was INR 15,514 crore; cash from operations at INR 12,804 crore (100.3% of net profit); free cash flow was INR 114,000 Mn.

• Net income for the quarter was INR 12,819 crore, up from INR 12,105 crore YoY.

• Basic and diluted EPS for the quarter stood at 35.27, up from 33.28 YoY.

• Total cash and investments rose to INR 487,040 Mn.

• Dividend payout ratio remains high, with total equity dividend percentage at 1,100% for the quarter.

Outlook and guidance

• Management remains optimistic for FY2026, expecting international revenue to surpass FY2025, supported by a strong order book and AI-led demand.

• Growth recovery timing depends on macroeconomic clarity, expected by late July or early August.

• Pricing remains stable with no broad-based pressure.

• Forward-looking statements highlight risks from competition, wage increases, currency fluctuations, and geopolitical instability.

• Long-term operating margin target remains 26%-28%.