TCS IN Q4 REPORTED REVENUE OF US$ 7,465 MN, DOWN 1% QOQ & UP 1.4% YOY

News: TCS in Q4 reported revenue of US$ 7,465 mn, down 1% QoQ & up 1.4% YoY (in CC terms 4.2% YoY). Geography wise the growth was led by India (8.4% of the mix), MEA (2.4% of the mix), APAC (8.1% of the mix) and UK (16.8% of the mix) which grew by 33%, 13.2%, 6.4% and 1.2% respectively, whereas North America (48% of the mix) declined by 1.9% YoY in CC terms. Vertical wise the growth was driven by Regional markets & Others (15.4% of the mix), ER&U (5.7% of the mix), BFSI (31.2% of the mix) and Tech & Services (8.1% of the mix) which grew by 22.5%, 4.6%, 2.5%, 1.1% respectively. Whereas, Communication & Media (5.8% of the mix), LFS & Healthcare (10.1% of the mix), Manufacturing (8.4% of the mix) and Consumer (15.3% of the mix), declined by 9.8%, 5.6%, 2.9% and 0.2% respectively. The EBIT margin at 24.2%, was down 30 bps QoQ on account of 100 bps impact from tactical interventions w.r.t promotions and 60 bps from strategic marketing expense partially offset by 40 bps tailwinds of currency benefits, operating leverage and an optimised revenue mix. PAT for the quarter stood at ₹12,224 crore, down 1.6% YoY. The company recorded strong TCV for the second consecutive quarter of US$12.2 bn (up 19.61% QoQ) despite absence of any mega deal wins, with BFSI, Retail & North America reporting TCV of US$ 4 bn, US$1.7 bn & US$6.8 bn respectively. For FY25, the company reported revenue of US$30,179 mn, up 4.2% in CC terms. The EBIT margin for the year stood at 24.3% up ~12 bps YoY. While, PAT stood at ₹48,553 crore, flattish YoY.

View: TCS performance was weak for Q4, especially on margins front. However, riding on robust TCV for the second consecutive quarter and steadily growing pipeline, management maintained outlook for stronger FY26 compared to FY25, despite short-term macroeconomic uncertainties. Nonetheless, Growth is likely to remain uneven, with pressures in insurance, healthcare and auto currently. On the AI front, TCS highlighted a growing deal pipeline of small to medium-sized deals, signalling potential for market share gains and revenue improvement. To sum up, management positive commentary, despite uncertain times amid tariff tantrum, provides a cushion for confidence ahead.

Impact: Neutral