India · Delayed Price · Currency is INR Tata Consultancy Services Earnings Call Transcripts
Fiscal Year 2026
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Q4 delivered sequential growth with strong margins and a $12B TCV, driven by mega deals and AI momentum. FY 2026 saw a 2.4% revenue decline in constant currency but a four-year high operating margin. Entering FY 2027, management is confident with a robust order book and accelerating AI adoption.
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Q3 FY26 saw revenue of INR 67,087 crore, 2% QoQ and 4.9% YoY growth, with stable 25.2% operating margin and strong AI services momentum. TCV reached $9.3 billion, and management remains confident in continued growth, especially in AI-led offerings.
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Q2 FY 2026 saw 3.7% QoQ and 2.4% YoY revenue growth, with operating margin at 25.2% and TCV at $10B, driven by strong AI-led deals and international momentum. A new AI data center subsidiary and ListEngage acquisition mark strategic expansion, while margin improvement and robust cash flows continue.
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Q1 FY26 saw a 3.1% revenue decline year-on-year in constant currency, but TCV rose 13.2% to $9.4B. Operating margin improved sequentially to 24.5%, with strong deal wins and robust cash flow, though project delays and global uncertainty continue to weigh on near-term growth.
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Q1 FY2026 saw a 3.1% year-over-year revenue decline but improved margins and strong cash conversion. Order book and pipeline remain robust, with AI and digital services driving growth, though macro uncertainty continues to delay discretionary spending.
Fiscal Year 2025
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A five-pillar strategy is driving transformation toward AI-led services, with major investments in talent, internal AI adoption, and ecosystem partnerships. Financial discipline is maintained with a $1B annual investment, a 26%-28% margin target, and robust capital returns. AI-related revenue and customer satisfaction are rising, supported by rapid innovation and strategic acquisitions.
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Leaders outlined a phased, high-density AI data center strategy, emphasizing demand-driven build-out, green energy, and deep integration with hyperscalers and AI firms. The investment is core to the AI-led growth plan, with strong group synergies and a focus on long-term, high-margin contracts.
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FY 2025 revenue grew 4.2% in constant currency, surpassing $30 billion, with strong Q4 TCV and resilient margins. Management expects FY 2026 to improve, supported by a robust deal pipeline, despite ongoing macro uncertainty.
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Q4 FY25 saw revenue growth of 2.5% year-on-year, with strong order book closure and resilient client metrics. Margins declined slightly due to investments and promotions, but management remains optimistic for FY26, expecting improved performance as macro uncertainties ease.
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Q3 FY25 saw 4.5% YOY revenue growth in constant currency, margin expansion, and a record $10.2B TCV with broad-based deal wins. Early signs of discretionary spend recovery and strong regional market growth offset headwinds from BSNL contract tapering.
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Revenue grew 5.5% YoY in constant currency, with strong deal momentum and robust growth in India and other emerging markets. Operating margin declined to 24.1% due to large transformation projects, but GenAI adoption accelerated and the pipeline remains strong.
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Q1 FY25 saw 5.4% YoY revenue growth and strong operating margins, with broad-based sequential growth across most markets and verticals. The order book remained robust at $8.3B, while AI and GenAI engagements doubled. Management remains cautious due to ongoing macroeconomic uncertainty.
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Revenue grew 4.4% year-over-year in constant currency, with strong India and manufacturing growth, and operating margin at 24.7%. AI, cloud, and cybersecurity drove deal momentum, while management remains cautious on sustained growth due to market uncertainty.