Tata Consultancy Services (TCS) CEO K Krithivasan addresses a press conference in Mumbai on Thursday, April 10, 2025.
| Photo Credit:
SHASHANK PARADE/PTI
Tata Consultancy Services (TCS) reported a net profit of ₹12,224 crore for the fourth quarter of the financial year 2024-25, down by 1.6 per cent compared to ₹12,434 crore in the same quarter of the previous fiscal year, owing to uncertainty in the market leading to delays in decision-making and project ramp downs.
Net profit also decreased marginally by 1.2 per cent on a sequential basis compared to ₹12,380 crore in Q3. Net profit grew 5.7 per cent from ₹45,908 crore in FY24 to ₹48,553 crore in FY25. It may be noted that the FY24 number includes a one-time legal claim.
“We had spoken about the improving market sentiments and early signs of revival in discretionary spends in January, but this was not sustained due to many of the discussions around tariff,” said K Krithivasan, Chief Executive Officer and Managing Director.
Revenue for the company grew 5.2 per cent to ₹64,479 crore on an annual basis and 0.7 per cent on a quarterly basis. For FY25, revenue grew by 6 per cent year-on-year to ₹255,324 crore.
Krithivasan said, “We are pleased to cross the $30 billion in annual revenues and achieve a strong order book for the second consecutive quarter. Our expertise in AI and Digital Innovation, coupled with the unmatched knowledge of customer context and global scale makes us the pillar of support for our customers in this environment of macroeconomic uncertainty.”
Tariff impact on verticals
Most verticals observed a grew sequentially barring regional markets that reported a reported a quarterly decline from 16.3 per cent in Q3 to 15.4 per cent in Q4. On an annual basis, regional market was the top vertical with a 22.5 year-on-year growth, followed by energy, resources and utilities and BFSI. Communication and media showed the worst performance with a -9.8 per cent year-on-year decline.
When asked about verticals affected by tariffs, Krithivasan said TCS noticed the most impact in hospitality and auto sectors followed by retail segments like CPG. While manufacturing and banking-financial services “seem okay,” the company noticed a softness in insurance.
“The BFS sector, the demand environment continues to be good, which gives us confidence for future. Communicastions is something that we need to watch out for,” said Krithivasan.
Similarly, Samir Seksaria, Chief Financial Officer, said the company does not plan to scale down capex. “If you look at this year, capex was significantly higher than the previous year. We did approximately ₹2,700 crore. In terms of investments, continuing into the next year, we do not plan to scale it down,” he said.
In terms of geography, North America’s growth declined by 1.9 per cent ear-on-year while India’s growth shot up by 33 per cent. UK grew by 1.2 per cent YoY.
Seksaria said, “We delivered robust profitability and cash flows this quarter in a very challenging environment without compromising on the right investments in our people, innovation and infrastructure for long-term value creation.”
Total contract value (TCV) grew 19.6 per cent to $12.2 billion. Operating margin stood at 24.2 per cent. But with a sequential improvement of 40 bps.
On hiring
The company’s workforce strength changed by 0.1 per cent to a headcount of 607,979 employees with an LTM IT attrition rate of 13.3 per cent.
Milind Lakkad, Chief HR Officer, said“Our trainee onboarding in FY25 was 42,000 as planned and expect FY26 numbers to be similar or higher.” In terms of hiring, Lakkad said, “We will decide during the year when to make that happen.” However, he added that he did not expect use of generative AI to impact the workforce.
Kranthi Bathini, Director – Equity strategy, WealthMills Securities, described Q4 as a mixed set of numbers. While the US economy has gone from talks of strength to recession, Bathini said the IT company remained optimistic despite the dire situation for IT sector.
“Q1FY26 will be a litmus test for tech companies as they noise of the tariffs will factor in. Numbers did not meet expectations,” said Bathini.
TCS appoints new COO and CSO
Krithivasan also announced the appointment of Aarti Subramanian as the President and Chief Operating Officer and Mangesh Sathe as the Chief Strategy Officer.
“We realised that as there is a significant technology transformation happening, there are a lot of areas where we need continued focus to build talent, partnership, and strengthen the talent pool available. We cannot depend only on homegrown talent in these new technologies. We realised that it is important that we add to the bandwidth of leadership that is already available,” said Krithivasan.
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Published on April 10, 2025
