Tata Consultancy Services (TCS) began FY27 on a strong note, reporting a 13.9 per cent year-on-year increase in first-quarter revenue to Rs 72,275 crore, as robust deal wins and growing transformation for AI helped India's largest IT services exporter navigate a still-cautious global technology spending environment, even as operating margins came under pressure.
Consolidated net profit rose 4.6 per cent year-on-year to Rs 13,349 crore for the quarter ended June 30, 2026. The company, however, booked an additional Rs 668 crore as an exceptional charge towards the settlement of its long-running legal dispute with Computer Sciences Corporation (CSC). The board also declared an interim dividend of Rs 12 per equity share.
Commenting on the performance, Chief Executive Officer and Managing Director K Krithivasan said the company continued to build on its growth momentum despite geopolitical and macroeconomic headwinds. "Q1 FY27 reflects continued growth momentum and the strength of our strategic positioning, despite geopolitical and macroeconomic headwinds," he said, adding that strong deal conversion, improving client mining and expanding ecosystem partnerships position the company well to capitalise on growing customer investments in artificial intelligence, modernisation, cybersecurity, sovereign cloud and platform simplification.
Deal momentum remained strong during the quarter, with TCS reporting a total contract value (TCV) of USD 9.5 billion, including a marquee AI-led transformation deal with SKF. The company also scaled its AI business to a USD 2.6 billion annualised revenue run rate while adding five clients in the USD 10-million-plus revenue bucket, taking the total to 504.
Operating margin came in at 24 per cent, down from 25.3 per cent in the preceding quarter, as higher employee-related costs weighed on profitability. Employee benefit expenses rose to Rs 42,137 crore from Rs 40,143 crore in the March quarter.
Across business verticals, Banking, Financial Services and Insurance (BFSI), TCS' largest segment, grew 2.4 per cent year-on-year in constant currency, while Regional Markets & Others expanded 9 per cent. Consumer Business remained under pressure, declining 1.2 per cent over the same period.
Geographically, India emerged as the fastest-growing market, posting 22.9 per cent year-on-year constant currency growth. North America, the company's largest market, grew 2 per cent, while Continental Europe expanded 4.3 per cent.
TCS ended the quarter with a workforce of 593,798 employees. Voluntary attrition in IT services stood at 13.6 per cent on a last-twelve-month basis, reflecting continued stability in its workforce as demand for AI-led transformation and large-scale technology modernisation remained healthy. |
