The US administration’s tariff flip-flop and the resulting economic uncertainties have weighed on the decisions of the clients of IT services major Tata Consultancy Services (TCS).
The company on Thursday reported a consolidated net profit of ₹12,224 crore for the fourth quarter ended March 31 (Q4FY25), down 1.68 per cent from ₹12,434 crore in the corresponding previous quarter.
Persistent weakness in the US, the company’s largest market, coupled with rising total expenditure, pulled down the bottomline during Q4FY25, with the numbers coming in below market expectations.
Consolidated revenue for Q4FY25 was ₹64,479 crore, up 5.3 per cent from ₹61,237 crore in Q4FY24.
The company disclosed to the investors that its share of business in North America was at 48.2 per cent during Q4FY25 against 50 per cent during Q4FY24, while that in continental Europe was at 14.3 per cent in Q4FY25 compared with 14.6 per cent in Q4FY24.
In contrast, the share of business has increased in Asia Pacific and India to 8.1 per cent and 8.4 per cent, respectively, in Q4FY25 from 7.8 per cent and 6.7 per cent in the corresponding previous period.
Total expenditure during Q4FY25 was ₹48,878 crore, up 7.85 per cent from ₹45,319 crore in Q4FY24.
For the year ended March 31, 2025, consolidated revenue was ₹2,55,324 crore compared with ₹2,40,893 crore reported in the previous year.
Consolidated net profit during the year was ₹48,553 crore compared with ₹45,908 crore reported in the previous year.
On a constant currency basis, the company saw an annual revenue growth of 4.2 per cent.
“We had spoken about the improving market sentiments and early signs of discretionary spend revival in January. But this was not sustained. We are observing delays in decision making in projects with respect to discretionary investments,” said K. Krithivasan, CEO and MD, TCS.
While the company has not seen any major project cancellations, Krithivasan said over the next few months, the uncertainty is expected to settle down.
“While there could be some short-term uncertainties, we still believe based on the orderbook that we have and the kind of deals that we have signed, FY26 would be a better year than FY25,” he said.
On a sequential basis, the company’s operating margin saw a decline of 30 basis points, while net margin saw a decline of 40 basis points.
On a year-on-year basis, the margins were down by 180 basis points and 130 basis points, respectively. Samir Seksaria, CFO, TCS, said that the company had given a full cycle of increments as well as made investments towards capacity building.
The headcount at the end of the quarter was 607,979, up from 601,546 in Q4FY24.
“Our trainee onboarding in FY25 was 42,000 as planned,” said Milind Lakkad, chief HR officer, TCS. He said that given the uncertain environment, the company will decide during the year when a wage hike will take place.
The TCS board has proposed a final dividend of ₹30 per share to be approved at the annual general meeting.
TCS also announced the appointment of Aarthi Subramanian as president and chief operating officer and Mangesh Sathe as chief strategy officer, effective May 1, 2025.
