TCS net profit dips 1.7% in Q4 FY25 amid uncertanity in North America
TCS sees short-term challenges arising from the current volatile market environment, but is optimistic about the prospects of FY26.
The net profit of Tata Consultancy Services (TCS) dipped by 1.68% for the fourth quarter of FY25, primarily due to global trade tensions. India’s largest technology services exporter flagged short-term challenges while being optimistic about better growth prospects for FY26.
TCS reported a net profit of Rs 12,224 crore for the January-March 2025 quarter, compared with Rs 12,434 crore posted in the similar period a year ago. However, the revenue in the fourth quarter grew by 5.3% on a year-on-year basis to touch Rs 64,479 crore, with the company benefiting from the rupee depreciating against the US dollar.
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The company said it has registered a total contract value of $12.2 billion for the fourth quarter of FY25—the second highest in its history. However, this does not necessarily present a positive outlook for the future.
TCS CEO K Krithivasan said in the earnings call, “There are delays in decision making as well as in projects, but no cancellations as such.”
He further remarked that the present uncertainty will be short-lived and showed optimism that growth for FY26 will be better than FY25. This confidence is primarily backed by the company's order book.
The North America market, which is the largest segment for TCS, has been under pressure for some time now. The CEO said the consumer segment, which includes retail, travel, hospitality and automobile, continues to witness a subdued momentum.
However, TCS recorded an operating profit margin of 24.2% in Q4 FY25, which was a 1.8% decline over the last year. In the fourth quarter of FY24, the margin was 26%.
TCS CFO Samir Seksaria said the dip in margins was linked to the company's investments over the last year.
For the full fiscal year, TCS reported a revenue of Rs 255,324 crore, which was a growth of 6% over FY24. The net profit during this period totalled Rs 48,553 crore. The company said the Total Contract Value (TCV) for FY25 was $39.4 billion.
In US dollar terms, the company crossed an annual revenue of $30 billion, with a net profit of $5.7 billion.
On the human resources front, TCS ended the fourth quarter with a total headcount of 607,979—an addition of 625 people compared to Q3 FY25.
TCS Chief HR Officer Milind Lakkad said, “Our trainee onboarding in FY25 was 42,000 as planned.”
The indication was that the company would hire a similar number of fresh engineering graduates in FY26.
Edited by Kanishk Singh