India · Delayed Price · Currency is INR Tata Consultancy Services Earnings Call Transcripts
Fiscal Year 2027
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Q1 FY 2027 saw 13.9% year-over-year revenue growth, strong AI-led deal momentum, and a $9.5B TCV, with operating margin at 24% and net margin at 19.2%. AI services revenue reached $2.6B, and optimism remains for Q2 as demand is expected to improve.
Fiscal Year 2026
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Q4 saw sequential revenue growth and strong deal wins, with annualized AI revenue surpassing $2.3 billion. FY 2026 operating margin hit a four-year high despite a slight revenue decline, and the company enters FY 2027 with a robust order book and positive outlook.
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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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Revenue declined 3.1% year-over-year, mainly due to BSNL wind-down and delayed discretionary spending, but operating margin improved to 24.5% and net profit rose to INR 12,760 crore. Strong order book and robust AI-led service demand support an optimistic FY2026 outlook.
Fiscal Year 2025
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A five-pillar strategy is driving the transformation into an AI-led tech services leader, with major investments in talent, platforms, and partnerships. AI-related revenues are growing rapidly, supported by disciplined capital allocation and a focus on customer value and innovation.
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Leaders outlined a phased, demand-driven AI data center strategy focused on high-density, energy-efficient infrastructure, targeting hyperscalers and AI companies. The investment leverages group synergies, aims for long-term contracts, and maintains strong financial discipline.
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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, 24.5% operating margin, and a record $10.2B TCV, with broad-based deal wins and early signs of discretionary spend revival. BSNL contract tapering is expected to be offset by new opportunities.
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Revenue grew 7.6% YoY in INR (5.5% in constant currency), with operating margin at 24.1% and net margin at 18.5%. Growth was led by India and emerging markets, while North America saw a decline. GenAI engagements surged, and the pipeline remains robust across sectors.
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Q1 FY25 saw 5.4% YoY revenue growth in INR and 4.4% in constant currency, with broad-based sequential growth across most markets and verticals. Operating margin was 24.7% despite wage hikes, and the order book stood at $8.3 billion. Management remains cautiously optimistic for FY25 amid ongoing macro uncertainty.
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Revenue grew 4.4% year-over-year in constant currency, with strong growth in India and manufacturing. Operating margin reached 24.7% despite wage hikes, and the AI pipeline doubled to $1.5 billion. Management expects FY25 to outperform FY24 but remains cautious due to market uncertainty.