India’s largest IT services company, Tata Consultancy Services (TCS), is set to announce its earnings for the fourth quarter of FY25 on April 10. Market analysts and brokerage firms are projecting a subdued financial performance, with expectations of modest revenue growth and flat profit margins, primarily due to seasonal softness, global macroeconomic concerns, and selective project delays. The company, widely viewed as a bellwether for the broader Indian IT sector, is likely to report a limited upside in topline and bottom-line performance, as the sector grapples with cautious client spending and a deceleration in discretionary IT budgets.
Highlights:
TCS to announce Q4 FY25 results on April 10.
Analysts project subdued financial performance amid seasonality and global headwinds.
Profitability and revenue growth likely to remain under pressure due to project delays and cautious enterprise spending.
Also Read :- Vodafone Idea Banks on Delayed 5G Rollout, Urges Swift Tariff Hike
Revenue Growth Projected at 5% Year-on-Year, Sequential Decline Likely
TCS is expected to report a 5 percent year-on-year increase in consolidated revenue, reaching ₹64,840 crore, as per consensus estimates. However, on a quarter-on-quarter basis, revenue is likely to witness a mild contraction, influenced by factors such as fewer billing days in the quarter, the waning impact of one-time BSNL revenues, and slower ramp-up in some large deals. Analysts attribute the sequential decline partly to seasonal effects, including employee furloughs and year-end budgetary tightening by global clients.
Notably, revenue in constant currency terms is forecasted to remain flat or decline marginally, underlining persistent challenges in core verticals like manufacturing and healthcare. While the BFSI (Banking, Financial Services and Insurance) segment may show resilience, other business units are expected to reflect subdued activity levels.
Highlights:
YoY revenue growth projected at 5%, reaching ₹64,840 crore.
QoQ revenue decline anticipated due to fewer billing days and weak vertical performance.
Manufacturing, retail, and healthcare verticals likely to lag.
Margins Expected to Remain Range-Bound Despite Rupee Depreciation
Operating margins are projected to see only marginal expansion—about 30 basis points sequentially—bringing estimated EBITDA to ₹17,154 crore. While rupee depreciation could offer some relief, its positive impact on profitability is expected to be offset by internal cost pressures. These include continued investments in talent upskilling, employee promotions, and re-skilling initiatives aimed at aligning with the evolving demand landscape, particularly around digital transformation and AI.
Additionally, cost optimisation at the client level has kept pricing under pressure, limiting the scope for significant margin improvement. The company’s ability to strike a balance between operational efficiency and employee retention amid ongoing demand volatility will remain in focus.
Highlights:
Margins likely to expand by a modest 30 basis points QoQ.
Internal costs from promotions and training weigh against rupee benefits.
EBITDA projected at ₹17,154 crore for the quarter.
Net Profit Seen Rising Marginally Amidst Flat Operating Leverage
TCS is projected to post a net profit of ₹12,554 crore, marking a modest 1.4 percent increase over the same quarter last year. The lack of meaningful margin expansion, coupled with flattish sequential revenue, has contributed to muted profit growth. While the company continues to maintain a strong cost discipline and a healthy deal pipeline, limited operating leverage and reduced project volumes are dampening overall profitability.
The earnings announcement will be closely watched for management commentary on deal renewals, margin outlook for the upcoming fiscal year, and further strategic pivots in light of the evolving global technology landscape.
Highlights:
Net profit expected at ₹12,554 crore, up 1.4% YoY.
Flattish operating leverage restricts strong bottom-line growth.
Investor focus on commentary around FY26 guidance and project outlook.
Flat International Revenues and BSNL Project Phase-Out to Impact Performance
A key drag on the Q4 performance is expected to be the drop in international revenues, particularly with a projected $30 million sequential fall in BSNL-related revenue. This decline in one-off telecom deals will reflect in the company’s top line, further emphasizing the need for broad-based demand recovery. Analysts expect constant currency revenues to remain flat, with weakness evident across North American and European markets, where client caution continues to weigh heavily on discretionary technology spending.
While TCS continues to maintain its strong position in annuity-driven deals, discretionary and digital transformation contracts have seen elongated decision-making cycles, further dampening near-term visibility.
Highlights:
BSNL-related revenue fall (~$30 million) expected to weigh on topline.
Constant currency international revenues forecast to remain flat.
Weak discretionary demand in North America and Europe a concern.
Deal Wins Expected to Remain Resilient, Large Closures Still Muted
Deal momentum, one of TCS’s key performance indicators, is likely to remain steady, with total contract value (TCV) of new deals expected in the $10–11 billion range. However, while the volume of small- and mid-sized contracts is healthy, closures of large and transformational deals are likely to remain muted due to the prevailing risk-averse posture among enterprise clients. Budget constraints, regulatory scrutiny in certain geographies, and prolonged due diligence cycles have slowed down the pace of mega-deal signings.
TCS has remained committed to long-term client engagements and is likely to continue investing in client relationship management and platform-led service models to drive future bookings.
Highlights:
Deal wins projected between $10–11 billion for the quarter.
Large deal closures still limited amid enterprise caution.
Focus on annuity revenue and multi-year contracts continues.
Investor Focus on Client Budgets, GenAI Adoption, and Pricing Trends
As the IT sector navigates a transition from traditional outsourcing to AI-enabled digital services, investors are expected to closely monitor TCS’s commentary on GenAI adoption, enterprise automation demand, and any pricing leverage from AI-led productivity gains. Additionally, CY25 client budgets, especially across the BFSI, retail, and healthcare sectors, will be closely tracked to assess the demand trajectory for FY26.
Signals of a rebound in discretionary tech spend or acceleration in GenAI projects could drive positive sentiment for the stock. Likewise, project delay trends, pricing revisions, and offshore mix shifts will be key metrics in evaluating the sustainability of revenue and margin guidance going forward.
Highlights:
Client budgets and GenAI project adoption under sharp investor scrutiny.
Key sectors for budget recovery include BFSI, retail, and healthcare.
Pricing trends and project delays to impact near-term revenue outlook.
