Tata Consultancy Services (TCS) Q4 25/26 earnings summary

Executive summary

• Q4 revenue grew 5.4% QoQ in INR (1.5% in USD), reaching ₹706,980 Mn ($7,621 Mn), with annualized AI services revenue surpassing $2.3 billion.

• FY26 revenue was ₹2,670,210 Mn (4.6% growth in INR, 0.5% de-growth in USD, 2.4% decline in constant currency); operating margin reached a four-year high of 25%.

• Q4 total contract value (TCV) was $12 billion, with three mega deal wins; FY26 TCV reached $40.7 billion.

• Strong client additions, with 66 clients generating over $100 million annually and closing headcount at 584,519.

• Audited consolidated and standalone financial results for FY26 were approved with unmodified audit opinions.

Financial highlights

• Q4 operating margin was 25.3%, net margin 19.4%; FY26 operating margin 25%, net margin 19.8%.

• Q4 operating income was ₹178,700 Mn; net income ₹129,040 Mn; FY26 operating income ₹668,380 Mn, net income ₹528,200 Mn.

• EPS for FY26 was ₹145.99; Q4 EPS grew 12.2% YoY, FY26 EPS grew 8.8% YoY.

• Cash conversion exceeded 100% of net profits; Q4 cash from operations was $1.6 billion, FY26 free cash flow was ₹429,830 Mn.

• Final dividend of ₹31 per share recommended, with total FY26 dividend at ₹126 per share.

Outlook and guidance

• Entering FY27 with a strong order book and positive momentum across most verticals; management expects regular seasonality in Q1 and Q2.

• Focus on balancing growth and profitability, with continued investments in AI, partnerships, and talent.

• Forward-looking risks include competition, currency fluctuations, talent retention, regulatory changes, and macroeconomic conditions.

• Monitoring regulatory changes, especially new Labour Codes, and adjusting accounting as needed.

• Strategic acquisitions expected to strengthen Salesforce and cloud consulting capabilities.