TCS Q4 profit dips 1.7% to ₹12,224 cr amid macro uncertainty; revenue up 5%

In line with analyst expectations, Tata Consultancy Services (TCS), India’s largest IT services firm, has reported a 1.69% decline in consolidated net profit for the December-March quarter (Q4 FY25) at ₹12,224 crore on year-on-year basis, compared to ₹12,434 crore net profit during the same period last year. Most of the major brokerages have expected all major IT service companies, including TCS, to report "sluggish" or "weak" earnings in Q4 FY25, primarily due to macro headwinds in the IT sector.

The company, in an exchange filing today, said the Q4 FY25 growth was led by strong double-digit growth (37.2% YoY) in regional markets, with segments like energy, resources and utilities (+5.1%), manufacturing (+2.9%) toppping the chart.

The Tata Group company said "cloud" led the growth among service lines, seeing strong and increasing traction in AI-adoption.

TCS MD & CEO K Krithivasan said the company has crossed the $30 Billion in annual revenues and has achieved a strong order book for the second consecutive quarter. "Our expertise in AI and Digital Innovation, coupled with the knowledge of customer context and global scale makes us the pillar of support for our customers in this environment of macroeconomic uncertainty,” he said.

TCS CFO Samir Seksaria said in FY25, TCS "defended" its margins while continuing with investments in talent and capability building. "We delivered robust profitability and cash flows this quarter in a very challenging environment,” he said.

From employees perspective, TCS Chief HR Officer Milind Lakkad said the company's trainee onboarding in FY25 was 42,000. "We continue to enjoy the pride of place as the employer of choice, and the industry-best retention rate.”

Brokerages Commentary on IT Sector

Among the brokerages, Antique, in its latest client commentary on the IT sector's Q4 financials, said it expect the top six Indian IT companies to report a sequential revenue decline in the range of -1.5% to flat QoQ in constant currency (CC) terms.

In its sector outlook, the brokerage said the macroeconomic environment has become "increasingly uncertain", particularly for Indian IT companies reliant on the U.S., their largest revenue market.

IDBI Capital had said Q4FY25 will be more "sluggish" than Q3FY25 for large cap like Infosys, HCLTech, Wipro in range of -1.2% to -2.8% QoQ. "In Q4FY25, we expect margin improvement can be seen in TCS & LTIM (30-65bps) in large cap and in mid-cap we expect flattish to positive trend (0 to 159bp) across services, ER&D & software except, sonata with a dip of 55bps QoQ."

HDFC Securities had said the IT sector is anticipated to report a "weak exit" for FY25E and provide unexciting guidance for FY26E amid rising global uncertainty. "We remain watchful and maintain our selective stance on the sector, favouring TCS within tier-1s and Persistent, LTIM, and Mastek among mid-tier IT companies."