Tata Consultancy Services (TCS), a key player in the IT sector, recently announced its financial results for the fourth quarter of FY25, revealing a net profit of ₹12,224 crore. This figure marks a 1.6% decline compared to the previous year’s profit of ₹12,434 crore, falling short of market expectations. TCS CEO K. Krithivasan highlighted that the ongoing global uncertainties, particularly those related to tariffs enacted by former U.S. President Donald Trump, significantly impacted the order book’s potential strength. Nevertheless, he reaffirmed that North America continues to be a crucial market for TCS.
Revenue Growth Amid Challenges
Despite the dip in net profit, TCS reported a 5.3% increase in revenue, reaching ₹64,479 crore in Q4 FY25, up from ₹61,237 crore in the same quarter last year. This growth was driven by a robust Total Contract Value (TCV) amounting to $12.2 billion in the quarter and $39.4 billion over FY25.
- Key Financial Highlights:
- Q4 FY25 Net Profit: ₹12,224 crore
- Q4 FY25 Revenue: ₹64,479 crore
- FY25 Net Profit Growth: 5.76% to ₹48,553 crore
Strong Operational Performance
TCS’s Chief Financial Officer, Samir Seksaria, noted the company’s impressive profitability and cash flows during a challenging economic landscape. He emphasized that TCS managed to sustain its investments in talent and technology while maintaining operational integrity. The operating profit, measured as Earnings Before Interest and Tax (EBIT), stood at ₹15,601 crore.
In his statement, Seksaria remarked, “In FY25, our disciplined execution and operational rigor were evident as we protected our industry-leading margins while continuing to invest in talent and capabilities.”
Regional Markets Drive Growth
The company’s growth trajectory was significantly influenced by regional markets, which saw an increase of 22.5%, along with 4.6% from the ERU sector and 2.5% from Banking, Financial Services, and Insurance (BFSI). The notable growth areas included:
- Internet of Things & Digital Engineering
- Enterprise Solutions
- Artificial Intelligence and Cloud Services
Employee Metrics and Attrition Rates
TCS reported an attrition rate of 13.3% over the past twelve months as of Q4 FY25. Despite this, the company expanded its workforce by adding 6,433 employees, bringing the total headcount to 607,979 compared to 601,546 in Q4 FY24.
Shareholder Benefits and Dividends
In a bid to reward its shareholders, TCS announced a final dividend of ₹30 per equity share with a face value of ₹1. This dividend will be disbursed five days after the conclusion of the upcoming annual general meeting, pending shareholder approval.
Leadership Transitions
TCS is set to undergo significant management changes, appointing Aarthi Subramanian as the new President and Chief Operating Officer, effective from May 01, 2025. Subramanian, currently the Group Chief Digital Officer at Tata Sons, has served as a Non-Executive Member on the TCS Board. Furthermore, Mangesh Sathe has been appointed as Chief Strategy Officer, transitioning from his role as CEO of Tata Strategic Management Group. He will oversee TCS’s Global Consulting Practice and manage M&A functions.
In summary, while TCS faced some challenges in Q4 FY25, the company continues to demonstrate resilience and growth potential in a competitive landscape. With strong revenue figures and strategic leadership appointments, TCS is positioning itself for future success.
