TCS Q1 FY26 profit up 6% to ₹12,760 cr, revenue rises 1.3% on strong deal wins and AI-led growth

Indian IT bellwether Tata Consultancy Services (TCS) has recorded a 6% year-on-year rise in its consolidated net profit for Q1 FY26 (April-June) quarter, reaching ₹12,760 crore compared to ₹12,040 crore in the same quarter last year. The growth in profitability was driven by an operating performance boost, robust deal closures, and a pivot towards AI-led solutions, despite global macro and geopolitical uncertainty.

Shares of Tata Consultancy Services closed 0.33% up at ₹3,395 on the NSE today.

In its consolidated financial results shared with exchanges, TCS stated that for the quarter ending June 30, 2025, its quarterly revenue stood at ₹63,437 crore, marginally up 1.3% YoY, while it recorded a decline of 3.1% YoY in constant currency.

Reporting a strong operating performance, TCS saw its operating margin expand by 30 basis points sequentially to 24.5%. The company generated net cash from operations amounting to ₹12,804 crore, equivalent to 100.3% of its net income.

The workforce stood at 613,069, a net headcount addition of 6,071 employees year-on-year. Attrition in IT services continued to decline, with the last 12-month rate at 13.8%. TCS also declared an interim dividend of ₹11 per share, with a record date of July 16, 2025, and a payment date set for August 4, 2025.

K Krithivasan, Chief Executive Officer and Managing Director, says the continued global macro-economic and geo-political uncertainties caused a demand contraction. "On the positive side, all the new services grew well. We saw robust deal closures during this quarter. We remain closely connected to our customers to help them navigate the challenges impacting their business, through cost optimisation, vendor consolidation and AI-led business transformation.”

TCS sees clients increasingly shifting their focus from a use-case-based approach to ROI-led scaling of AI. “Across industries, clients are increasingly shifting their focus from a use case-based approach to ROI-led scaling of AI. We are investing across the AI ecosystem, including infrastructure, data platform solutions, AI agents and business applications. Launching TCS SovereignSecureTM Cloud, TCS DigiBOLTTM, and TCS Cyber Defence Suite, to accelerate India’s AI-led transformation, was a particular highlight of this quarter,” says Aarthi Subramanian, Executive Director - President and Chief Operating Officer.

CFO Samir Seksaria believes TCS continued its investments in long-term sustainable growth this quarter. "We stayed agile and adapted to the dynamic environment, delivering steady margins. Our industry-leading profitability alongside robust cash conversion positions us well to make strategic investments for the future.”

Milind Lakkad, Chief HR Officer, said TCS now has 114,000 people with higher-order AI skills.

On cloud, TCS says it strengthened its strategic partnership with Microsoft in Q1 FY26 to develop new AI and cloud solutions that will help clients drive future business transformation and growth.

The company says it has observed a huge focus on GenAI across various customers. In enterprise solutions, TCS sees clients increasingly investing in streamlining their business workflows and modernising their digital core by adopting AI-powered SaaS platforms. In the IoT & digital engineering verticals, TCS says its smart manufacturing and digital thread services saw positive movement in continuation with previous trends.